11/03/2004

Five Convictions in Enron-Merrill Trial

Four Merrill Lynch executives were prosecuted Wed. November 3, 2004 for conspiracy and fraud. This was the first criminal trial to emerge from Enron’s 2001 demise.

The details involve the counterfeit sale of interest in power plants mounted on barges to Merrill Lynch. The purpose of the sale was to bolster Enron’s sales in order deceive the general public of Enron’s earnings capacity. The sale was to be bought back in six months. Enron in turn promised to compensate Merrill Lynch in the future by giving them more lucrative business partnership.

Merrill avoided prosecution for their involvement in Enron’s collapse last year by paying a substantial $80 million to the SEC. The compensation settled civil allegations concerning the barge deal, and Merrill never admitted wrong doing.

www.msnbc.msn.com/id/6401108

7 comments:

John West said...

I'm glad to see that the Enron debacle is finally coming to an end. It is good for the public to hear and learn of the recent ways that the SEC is dealing with the situation. It is one thing to hear of someone getting caught in a scandal, but it has far more reaching effects when that someone is brought down because of their doings.

Biancca said...

How can you avoid prosecution by paying money to the SEC? Isnt that like a bribe?

Anonymous said...

Seeing those associated with the Enron scandal getting what they deserve is a strong message to those in similar postions. It becomes a reality when you see that there really are consequences to our actions. I believe that because of what has happened fear will be struck into those contemplating unethical notions, and in general this will help the economy.

pramahaphil said...

Seeing Enron swindler's get what they deserve is something that should make all those that got burned smile. Although, there would be some who would argue that many of the most crooked are getting off with a slap on the wrist.

Bryce Larkin said...

Enron is a horrible scandal and Merrill is getting out of it by bribing the SEC. Since Merrill Lynch was in on the scandal they should also be punished. I don't think the full extent as Enron but close to it.

Maudi said...

Enron was the type of company that everyone dreams of owning. Many people are aware of what happend and I'm sure there are many who question what happend? Enron was a classic case of greed. Often times people become greedy and they think about what is in there own best interests and not about the companies. These people need to pay the price to show Amercians what will happen if they do the same thing. I am a firm believer that the men who are taking the fall are not the currpt men that started all of this mess.

Dr. Tufte said...

-1 for spelling mistakes in Maudi's post.

Hey Biancca - who ever said the government doesn't accept bribes? Oh yeah ... it was the government. Funny that.

I think what we are seeing here is strategic decision making as described in Chapter 10. Merrill Lynch settled for cash to prevent worse possibilities, and the SEC settled for no admission of guilt because they weren't sure they could prove that in court. It really is a bribe to make the situation disappear.