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All it takes is a little patience. F. Scott Yeager, a former Enron executive, got some good news from the 5th Circuit Court of Appeals in New Orleans, which ruled that it wouldn't revisit his case. So, he no longer has criminal charges related to financial fraud hanging over him. Yeager has been acquitted on all counts. This follows a June ruling by the Supreme Court, which tossed a previous 5th Circuit Court ruling that could have resulted in a new trial.
The ruling said, "Today, ... it is clear under our initial ... analysis the jury made a finding in acquitting Yeager that precludes prosecution on insider trading and money laundering." Samuel Buffone, who was one of Yeager's attorneys, stated that his client shouldn't have been indicted to begin with and didn't do anything wrong. It has taken them seven years to get to this point.
Yeager landed in hot water because he sold stock in Enron for more than $54 million before it began the plunge that would ultimately end with its bankruptcy in 2001. He faced 125 counts, was acquitted of five (four for wire fraud and one for conspiracy to commit wire and securities fraud) and wound up with a hung jury for the remaining 120, which included insider trading and money laundering. He was later indicted again on 13 counts of insider trading and money laundering.
The key to Yeager's acquittal was "collateral estoppel," a remote corner of the Fifth Amendment's double jeopardy clause, which keeps prosecutors from retrying individuals once a jury has voted not guilty on some charges but can't come to a conclusion on the others.
Yeager's is just the latest development in the (still) ongoing Enron saga. Several convictions have been tossed on appeal, and last week, the Supreme Court agreed to lend an ear to Jeff Skilling, the former CEO.
The changes on appeal just underscore how justice can come too late. The defendants have lost years of their lives and unbelievable amounts of "reputation" currency because of the Enron mess, and Arthur Andersen LLP, which was eventually acquitted, didn't exist to enjoy the victory. Once the process begins, even victory can be meaningless (or at least degraded). But, let's be sure to balance the world of litigation with the realities of operation. It's clear that something went wrong at Enron, which is why the stock price plunged and the company went bankrupt. Once the first domino fell, though, it was pretty clear that there would be plenty of collateral damage ... and we'll be dealing with the fallout for a while to come.
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