This week, the US Supreme Court decided not to hear the most recent appeal filed by Enron Corp’s former CEO Jeffrey Skilling to have his criminal conviction overturned. The justices offered no comment for why they decided not to review the U.S. 5th Circuit Court of Appeals’ ruling that turned down Skilling’s legal challenge.
A Houston jury had convicted Skilling in 2006 on 19 criminal counts for his role in orchestrating the massive corporate fraud crime that led to the demise of the energy trading giant. Over 4,000 company employees found themselves out of work when Enron filed for bankruptcy in 2001. Many of them lost their life savings. Meantime, investors sustained losses in the billion of dollars. (In 2008, Enron investors and shareholders received their respective shares of over $7.2 billion from financial institutions accused of playing a part in the company’s collapse. Some 1.5 million entities and people were eligible.)
Prosecutors had accused Skilling of taking part in a scam to inflate Enron’s share price by concealing the company’s true financial shape from the public. They claimed that he engaged in accounting tricks, “hocus-pocus, trickery… half-truths… and outright lies.” Although Skilling was convicted of securities fraud, insider trading, making false statements to auditors, conspiracy, and other crimes, he maintains that he didn’t commit any crimes. He also contends that he never attempted to profit from Enron’s collapse. Skilling is currently serving a sentence of over 24 years in prison.
In 2010, he won a Supreme Court ruling that found his conviction to be flawed. The high court rejected the government’s use of a federal law that allowed prosecutors to bring cases against company executives who allegedly deprived employers of their honest services.
However, the 5th Circuit found that even if the honest services fraud law had been invalidated when the Texas jury was deliberating the case, the outcome of his criminal proceedings would likely have been the same. Noting the overwhelming evidence that was presented to show that Skilling intentionally commit securities fraud, the appeals court upheld the conviction against him. However, because of an earlier appeals court ruling that the trial judge made an improper application of an enhancement to Skilling’s prison term, the former Enron CEO will get a resentencing trial.
With law offices located in Houston, our Texas securities fraud lawyers represent clients throughout the state, Shepherd Smith Edwards and Kantas, LTD, LLP is not just the largest stockbroker fraud law firm in Texas, but also, it is one of the biggest in the country. We concentrate solely on helping individual and institutional investors recoup their lost investments.
Supreme Court declines look at Skilling case, The Wall Street Journal, April 16, 2012
Enron investors to split billions from lawsuit, CNN, September 9, 2008
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