General Electric Co. (GE), which two years ago paid an estimated $32 billion to combine Baker Hughes Inc. with its oil and gas unit to create a mammoth oilfield services enterprise, is fighting back after an accounting expert claimed the conglomerate has obfuscated financial issues and filed inaccurate reports with federal regulators.
Articles from Enron
Former Enron CEO Skilling Freed from Federal Custody
Former Enron Corp. CEO Jeffrey K. Skilling, who helped create the leading natural gas trading platform in the country before illegal schemes spiraled the company into bankruptcy and him to federal prison, is a free man.
The U.S. Department of Justice (DOJ) has notified victims of Enron Corp.’s fraud and 2001 bankruptcy that they have until April 17 to object to a possible resentencing agreement with imprisoned former CEO Jeffrey Skilling. Skilling, 59, has served more than six years of a 24-year prison term after he was convicted by a Houston jury in U.S. District Court for the Southern District of Texas in May 2006 on 19 criminal counts for securities fraud, conspiracy, making false statements to auditors and insider trading (see NGI, May 29, 2006). The U.S. Court of Appeals for the Fifth Circuit in New Orleans reaffirmed the conviction in 2011, finding that the federal government’s evidence of conspiracy was “overwhelming,” but it reiterated, as it had in 2009, that the sentence had been miscalculated by the district court (see NGI, April 11, 2011). The resentencing issue was remanded to the lower court (U.S. v. Skilling, U.S. District Court, Southern District of Texas, No. 04-cr-00025).
The U.S. Supreme Court has rejected without comment former Enron Corp. CEO Jeffrey Skilling’s appeal to overturn his 19 convictions for fraud. Two years ago the high court ruled that federal prosecutors had used an improper legal theory to convict Skilling in 2006, saying Skilling couldn’t be convicted under a federal statute outlawing fraudulent schemes to withhold “honest services” (see NGI, June 28, 2010). Although the Supreme Court invalidated the prosecution’s honest services theory, the U.S. Court of Appeals for the Fifth Circuit in New Orleans last year found the federal government’s evidence of conspiracy sufficient to uphold his convictions (see NGI, April 11, 2011). The Fifth Circuit said the verdict would have been the same because there was “overwhelming evidence that Skilling conspired to commit securities fraud and thus we conclude beyond a reasonable doubt that the verdict would have been the same absent the alternative-theory error.”
FERC Sets Paper Hearing, Settlement Talks on Western Power Contracts
FERC last Thursday set a paper hearing on a remand of a long-running case centered on millions of dollars in Enron-era wholesale power contracts that western power companies protested tied them to artificially high prices. The Commission action came just 14 days after it officially received the remand of its decision to uphold the contracts. The paper hearing will be held in abeyance, however, while parties attempt a settlement of the seven-year old case.
Blunder Forces House to Pass CFTC-Related Farm Bill Again
The House last Thursday passed for a second time the $300 billion farm legislation that closes the “Enron Loophole,” which has allowed portions of large electronic trading platforms to circumvent the full oversight of the Commodity Futures Trading Commission (CFTC) for years.
House Passes CFTC-Related Farm Bill for Second Time
The House Thursday passed for a second time the $300 billion farm legislation that closes the “Enron Loophole,” which has allowed portions of large electronic trading platforms to circumvent the full oversight of the Commodity Futures Trading Commission (CFTC) for years. Lawmakers were expected to vote later Thursday on Title III of the farm bill, which was inadvertently left out of the first bill sent to President Bush, and which forced the second vote.
Linda Lay Says Husband Committed No Crimes
The widow of Enron Corp. founder Kenneth Lay stated in a court filing in Houston Friday that her husband never committed any crimes, and she is entitled to keep all of the property and money that the government is seeking from his estate.
Feds Given Greenlight to Pursue Lay’s Estate
The federal government may proceed with its attempt to seize about $13 million in cash and assets from the estate of Enron Corp. founder Kenneth Lay, who died last year (see Daily GPI, July 6, 2006), according to a district court judge in Houston.
The 5th U.S. Circuit Court of Appeals in New Orleans has ruled that Enron Corp. shareholders may not proceed with a class action lawsuit against the company’s former investment banks for their alleged role in the accounting fraud that destroyed the company. The appeals court’s ruling reverses a decision by U.S. District Judge Melinda Harmon in Houston. Harmon approved the original class action lawsuit by the shareholders, and she then expanded it in January, allowing 30 state attorneys general to join the case (see NGI, Jan. 15). The 5th Circuit opinion read in part, “As we have recognized, class certification may be the backbreaking decision that places ‘insurmountable pressure’ on a defendant to settle, even when the defendant has a good chance of succeeding on the merits.” William Lerach, one of the shareholders’ attorneys, said the legal team likely will appeal the ruling “as quickly as possible.”