Thursday, May 25, 2006

Enron Verdict

The Enron verdict is in: Lay was found guilty on 6 of 6 counts; Skilling on 19 of 28. Scott Martin at LegalBlogWatch links to various blogs and documents. One link: Peter Lattman at Wall Street Journal's Law Blog pointing out three aspects of the cross-examination of Jeffrey Skilling that could have hurt him.

Meanwhile, on the civil side of the docket, Judge Melinda Harmon (S.D. Tex.) approved a settlement between three megabanks (Canadian Imperial Bank of Commerce, JPMorgan Chase & Co., and Citigroup Inc.) and a group of shareholders; the lead plaintiff in the group of shareholder lawsuits is the University of California. The banks will pay $6.6 billion to settle claims that they helped Enron manipulate earnings.

Image: shredded currency. You can buy a 5-pound bag with at least $10,000 of shredded currency from the Bureau of Engraving and Printing Store for $45. It would take 660,000 of those bags to add up to the settlement just approved. That's 3,300,000 pounds. So if you're tempted to think that the settlement was a ton of money, think again. By my calculations, it's about 1,650 tons of money. That's a lot. And that gives some small idea of the Enron mess -- after all, this settlement is just between three banks and certain investors -- neither all the consumers and investors harmed nor all the parties who perpetrated the fraud.

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