We recently presented a look at some of the most notorious financial felons of contemporary times.

Since then, news has included the indictment of Mark Cuban for insider trading in a case that is somewhat reminiscent of Martha Stewart's case. According to the SEC, the billionaire entrepreneur asked his broker to sell all his shares of Mamma.com after the company's CEO confidentially told him of an impending stock offering that would dilute the value of all existing shares. By selling before the information became public, Cuban is said to have sidestepped losses of more than $750,000. Cuban insists, though, that no agreement existed to keep the information confidential.

And then there was the indictment in Texas of Vice President Dick Cheney, along with former U.S. Attorney General Alberto Gonzales and others. There seems to be a conflict of interest between the vice president's influence on the federal agency that oversees federal immigration detention centers and his substantial holdings in Vanguard Group, which invests in private prison companies. But does the lame-duck county district attorney, who was a no-show in court, have the authority to bring charges against federal officials with regard to federally run institutions?

This post is part of a feature in which he wonder whatever happened to some notorious financial felons. See all 17.

There was one company that I believed in during my journalism career. It was a scrappy underdog challenging the establishment and made scads of money. Back in the day, it was sure easy to root for Enron, and Andrew Fastow was one of the reasons why.

Fastow was not suave like his boss Jeffrey Skilling -- whom I met several times -- and lacked the people skills of President Bush's pal Chief Executive Ken "Kenny boy" Lay. No, Fastow was a humorless number cruncher. His importance to Enron can not be overemphasized. As Time magazine notes, "Fastow had a skill Skilling needed; he did asset 'securitization,' a means for banks to sell off risk in the form of securities backed by mortgages or other obligations."

Wow, the roots of today's financial difficulties can be traced back to Enron!

There is nothing evil. about special-purpose entities. At first, Enron's initial investors did well because the deals were straightforward. CalPERS, put $250 million into an spe called jedi i, which invested in natural gas projects. Four years late, the California State Pension Plan CalPERS got back $433 million, a 73% return over four years.

In my 20-year career as a financial writer, there have been a number of times when I've been truly shocked by news events. This year has had more than its share -- with Lehman's bankruptcy and Merrill Lynch's forced sale and Eliot Spitzer's prostitution scandal at the top of the list.

But in 2006, probably the biggest shock was when Enron founder Ken Lay died suddenly of a heart attack. He had been convicted just six weeks earlier of 11 counts of securities fraud and related charges. At age 64, he seemed destined to spend the rest of his life behind bars. His sentencing was set for Oct 23.

But Lay died on July 5 while vacationing at Snowmass, Colorado. George H. W. Bush was among the 1,200 guests at his funeral.

Lay's detractors howled in protest. Some thought he had somehow faked his death.

Others knew instantly that this meant his conviction wouldn't stand. And, indeed it was vacated a couple of months later. The law dictates that when someone dies before using up all their available appeals, the conviction doesn't count.

According to the letter of the law, Ken Lay 'got away' with his Enron crimes. But it took his death for that to happen. And his name certainly wasn't cleared. For most Americans, Ken Lay still stands for the worst in corporate corruption and greed.

Remember when former Enron boss Ken Lay's wife Linda went on TV and cried that "It's all gone. We've lost everything!" in perhaps the least sympathetic televised display of misery since the Wicked Witch of the West cried that she was melting in The Wizard of Oz?

Well, it turns out she hasn't quite lost everything. In fact, she managed to come up with the cash to pay "all amounts currently due" to the Huntingdon Council of Co-Owners, the condo association for her luxury residence in Houston. The association had sued claiming she owed $109,000. In condo fees! That's enough to cover about 60 years of condo fees for my unit.

According to the Associated Press, "Linda Lay's assessment was based on ownership of nearly 3% of the 34-story building, the Houston Chronicle reported. She owns a 12,827-square-foot condo on the 33rd floor worth more than $4 million, plus 10 parking spaces and four storage units, the lawsuit said."

I'm on the floor crying with sympathy for this poor woman. Living all alone in that 12,827 square foot condo! Perhaps BloggingStocks readers could all pitch in and buy her a violin. She'd be a natural.

Because a long, holiday weekend can be a great time to pause and reflect -- to take a step back and look at the bigger picture -- here are some highlights from BloggingStocks a year ago today: May 25, 2007.

• Consumers and investors alike were eager for the launch date of Apple Inc.'s (NASDAQ: AAPL) ballyhooed iPhone.
• Coca-Cola Co. (NYSE: KO) announced its acquistion of Vitaminwater.
• Online retail shopping was on the upswing.
• Dell Inc. (NASDAQ: DELL) planned to begin offering its products at Wal-Mart Stores Inc. (NYSE: WMT).
• Declining new home sales in April signalled more weakness in the housing market.
• Home Depot's (NYSE: HD) new CEO began the 2007 annual meeting with an apology.
• Microsoft Corp. (NASDAQ: MSFT) denied rumors about its interest in acquiring Yahoo! Inc. (NASDAQ: YHOO).
• BloggingStocks speculated about the blue chips of 2017.
• Georges Yared reflected on the state of the market conditions and prospects for the future: Part 1 and Part 2.

And two years ago, May 25, 2006:

• Microsoft admitted that there would be delays in the relase of its Vista operating system.
• Ken Lay and Jeff Skilling were found guilty of defrauding Enron investors.

A month ago, I suggested that Countrywide Financial Corp. (NYSE:CFC) could be this year's version of Enron. One reason: Enron's Ken Lay and Countrywide's CEO Angelo Mozilo both publicly boosted their companies' prospects as they dumped their shares.

Today's New York Times [registration required] seconds that motion by reporting that North Carolina's Treasurer, Richard Moore, has asked the SEC to investigate Mozilo's $132 million in stock profits -- which he took as Countrywide traded above $40 -- it's now trading at $18.80 -- right before the subprime mess heated up starting in October 2006.

Moore's letter expressed his anger: "As an investor and a Countrywide shareholder, I was shocked to learn that C.E.O. Angelo Mozilo apparently manipulated his trading plans to cash in, just as the subprime crisis was heating up and Countrywide's fortunes were cooling off." How is this like Enron's Ken Lay? As I posted before, Ken Lay sold about $100 million worth of shares even as he was telling Enron employees what a great investment its shares were.

Will the SEC investigate? Will Mitt Romney keep Mozilo's campaign contribution? Stay tuned for the next episode.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Countrywide securities.

More Countrywide Financial news

Douglas McIntyre: Countrywide (CFC) CEO stock sales questioned
Zac Bissonette: Countrywide (CFC) has a new PR campaign, but what about real change?
Eric Buscemi: Countrywide (CFC) showing some class and good business sense
Peter Cohan: Is Countrywide (CFC) too big to fail?
Douglas McIntyre: Could subprime problems hurt search engines?
Peter Cohan: Is Bank of America's (BAC) purchase of Countrywide Financial (CFC) a good bet?
Joseph Lazzaro: The (still) foggy subprime mortgage sector
Peter Cohan: What the mortgage meltdown means to you
Michael Fowlkes: Countrywide Financial (CFC) adds to subprime panic
Peter Cohan: Could Countrywide Financial (CFC) be put down?

Google Inc. (NASDAQ: GOOG) invested $3.9 million in 23andMe, the bio-tech start-up of Anne Wojcicki, the wife of Sergey Brin, Google co-founder. While that's pocket change compared to Brin's net worth of around $14 billion (and even more of a drop in the bucket when you take into account the size of Google), it raises some interesting questions about ethics and conflicts of interest.

There's nothing inherently wrong about financing the start-up of a spouse of the company's founder, as long as it's done at arm's length. In terms of ethics, the question is, Would someone other than Ms. Wojcicki have been able to secure capital from Google for the same thing?

It seems unlikely. I can't find much record of Google investing in other bio-tech companies (if it does, it would probably be a sign of diworsification), although a Google spokesman said that the acquisition actually made strategic sense because, "They are developing new ways for people to make sense of their genetic information" -- and Google is all about information! Hmm . . .

This isn't a big deal, but it just doesn't smell quite right. At Enron, all employees were required to make their travel arrangements through an agency owned by Chairman Ken Lay's sister. Was that a big deal in itself? Probably not, but it was indicative of self-dealing on the part of the company's management that went far deeper than a travel agency.

Of course, I'm not suggesting for a second that Google is the next Enron, but I think investors should be on the lookout for more signs of related-party transactions and questionable dealings at Google.

Voting continues for the Best & Worst of 2006, and there is no closer race right now than between Borat, Sacha Baron Cohen's bumbling faux-journalist from Kazakhstan (as well as the motion picture named for him), and YouTube, everyone's favorite source for wacky foreign television commercials, drunken celebrity rants, and re-edited movie trailers, as the Up-and-Comer of 2006. Whether you think that Baron Cohen is brilliantly clever or just a cheap-shot artist, whether you believe YouTube offers hours of wholesome entertainment or is just an online version of America's Dumbest Home Videos, let your vote be counted.

The contest for Biggest Fall from Grace is not quite so close, but close enough that with a late surge, Mel Gibson could still overtake current frontrunner, President Bush. As some commenters have pointed out, Bush really didn't have far to fall as he'd already lost credibility before 2006. So if you think Gibson's arrest and drunken tirade have permanently harmed his career (despite the apparent popularity of Apocalypto), then lend your support to help him take the lead in this category.

Many of the close races are for second place. While Donald Trump leads in the Most Annoying Money Personality category, there is a virtual tie for the silver among Suze Orman, Jim Cramer, and Mark Cuban. In the Most Overpaid CEO contest, Barry Diller of IAC (NASDAQ:IACI) and Bob Nardelli of Home Depot (NYSE:HD) are battling for second place behind Lee Raymond of ExxonMobil (NYSE:XOM). The Walton family has a slight edge over Martha Stewart for second place as the Tycoon We'd Send to the Poor House, and the Enron sentencing and the real estate market trail gas prices as the Money Story of the Year.

As we've learned from the past few national elections, every vote counts.

Voting for the Best & Worst of 2006 ends Christmas Eve, so don't wait too long. Results will be posted December 28.

For another view on Borat and YouTube, as well as many other of the nominees, also check out MarketWatch's Winners and Losers of 2006.

This post is written as part of AOL Money & Finance's Best & Worst of 2006. Vote for it as the Money Story of the Year or check out the other nominees in the category.

The demise of Enron will likely turn out to be the biggest business story of the decade -- maybe even the century. The once $60 billion market cap energy trading giant dissolved into worthlessness in an ugly morass of accounting fraud and human greed in late 2001.

But 2006 was the year in the long, sad saga that some justice was finally meted out to Enron's top executives. Former chief executives Ken Lay and Jeff Skilling were both convicted in the spring on charges including securities fraud, making false statements, and conspiracy. Enron's former chief financial officer Andrew Fastow was sentenced to six years in jail after he pleaded guilty to several charges of securities fraud and agreed to testify against his former bosses.

But the Enron story continued to provide shocking twists, even at this stage. Ken Lay died suddenly of a heart attack in July. BloggingStocks readers not only doubted that he had died of natural causes (many suspected suicide), but others doubted he had died at all.

Lay's conviction was vacated in October because he died before his sentencing. That seems to have preserved his wealth for his heirs.

Jeff Skilling was sentenced to 24 years in jail in late October. When we wrote about the sentence, 64% of readers responding to a poll said the jail time was too short. Skilling, at his sentencing, continued to profess his innocence.

Since becoming a part of the bloggingstocks team I have observed that two things have gotten readers' passions in an uproar more than anything else based on clicks and comments. One is the Ken Lay / Enron saga and the other is Ebay (NASDAQ:EBAY) and their variable strategies for dealing equitably with vendors. Jim Cramer posts also get a lot of attention from our readers...go figure?

Ken Lay, the deceased CEO of Enron, escaped punishment for his conviction on numerous charges related to Enron's demise, not the least of which was selling his soul. In my book, he deceived the public, he deceived investors, he deceived his employees, he deceived his business associates, and he deceived himself. His family cremated the body so not much is left. While he will not be spending any time behind bars the pressure of the prosecution, the trial and verdict no doubt caused him to pay a high price. He lost his reputation, he lost his privilege and he lost his life. What else is there? His soul?

In reading some of the negative comments about Ebay from my many posts it is clear that there is a segment of the Internet population that feels Ebay sold its soul to the devil. That got me thinking about what a soul is worth. And from there, could you auction one off on Ebay? People sell the naming of stars in the universe. People sell rights to other imaginary things in the solar system. They legitimize this with various certificates and nonsense... and they make some money. How much is a soul worth? In Ken Lay's case it may have been worth billions of dollars at one time; he must have had "key man insurance". When he sold his soul a lot of Enron value evaporated. Now that he is gone his soul is worth nothing -- or is it? If someone posted it for sale on Ebay would there be any bids? Would Ebay accept such a thing? If there were bids what would the high bidder receive?

Yes I know this is all very silly and I reserve the right to be silly at times, if it stretches one's mind and causes people to think about how their actions affect others and how value is created and destroyed. At the same time there have been some strange things for sale on Ebay. Does Ebay strictly prohibit the sale of souls? If so, than how could they have sold theirs? Is this another conflict of interest?

In the mean time Ebay has issued a very positive quarterly earnings report to the chagrin of it's detractors; Cramer's ratings are through the roof (even if he has lost some integrity in the process); and Jeffrey Skilling, the ex-Enron president, was sentenced to 24 years and 4 months behind bars, thus assuring that we have not heard the end of this saga. So that must be what the judge and jury thought his soul was worth. It will be a course in most business schools for sure. Oh yes... and I have my worthless Enron stock certificate framed and hung on the wall in my office as a reminder that I make mistakes too and should try very hard not to repeat them.

Disclosure: I sold my last shares of Ebay January 2006. My Enron certificate does have some minimal value as a collectors item.

Other must reads:

Time Warner Cable no longer stuck in the muddle

Energy: Going forward while looking back

All Cramer needs now is a PIE in the FACE
DOW 14,000 here we come!

Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.

Today's funeral of Ken Lay puts to rest his physical presence. Where his soul will end up has been commented on many times and there does not seem to be any controversy. The fact that his family wanted to cremate his body (beating Satan to the punch or hiding the evidence?) is ironic in the sense that when he was alive his company (and my company too), crashed and burned from a financial height that I do not believe has been achieved before in such a short period of time.

The pain of his (and Fastow's, Skilling's and others) financially and morally corrupt adventures spread far and wide affecting a very broad swath of the nation and will be reviewed for decades in business schools, board rooms, Federal Commissions and more.

I crashed with the rest of the shareholders, workers, lenders and affiliated companies. To me the amazing thing is that in one day I made the best sell decision of my investing career and the worst buy. When Cisco Systems hit an all time high of $82 and was the highest "valued" company in the world at a capitalization of $450 billion, some idiot analyst prognosticated that it would be the first trillion dollar company. At the time Cisco was touting 50% annual growth for years out and my alarm bells began flashing. I decided it was time to abandon ship. I sold.

So what did I do with the money from the sale? I decided it would be a good idea to diversify more and moved the money from Internet/tech to energy. The sector was lagging at the time and I thought it might be ready for a rebound.

I wrote a post last week about the sudden and shocking death by heart attack of Ken Lay, Enron's founder. That single post has not only been one of Blogging Stocks' mostly widely read entries, but it also has produced an incredible outpouring of emotion from readers -- one that keeps on coming.

You know the five stages of grief? Well, at least three are clearly represented in the comments.

Denial is by far the most prominent (that's both denial that he died of natural causes and denial that he is dead at all). Just today a reader commented that he could have been injected with something that gave the appearance of a major heart attack. Many have invoked his relationship with President Bush to imply all sorts of alternative scenarios -- quite often involving the witness protection program.

Most convincing was a doctor who wrote that he found it implausible that a man of Lay's age and wealth could have an undiagnosed heart condition that would trigger a massive coronary without warning. That one got me thinking...

Anger would be next, as far as representation in blog comments. I would say the bulk of the 139 commenters to date are very angry at Lay -- for losing their money; for losing the money of his employees, for possibly preserving great wealth for his wife by dying before his sentencing (video news report). Many of them even are mad at him for dying since they liked to imagine him suffering during his prison term. Just let it go, I say.

Acceptance was another stage clearly in evidence. Surprised? Lots of of these folks clearly found comfort from the Bible and urged others not to cast the first stone and the like. 

Depression is one stage that didn't show up in great numbers in the comments. I'm sure there were plenty of people depressed by reading all those angry comments hurled at a man we just learned had died. But do truly depressed people comment on blogs? I doubt it.

What about Bargaining? I didn't see much sign of that. It's not really applicable here -- that's the stage where you basically bargain with God (or your deity of choice) not to let something bad happen and you'll donate all your money to charity or something. But we're talking about Ken Lay, one of the most disgraced corporate executives in history. And who would bargain over him, even posthumously?

In a chilling twist to the Enron saga -- an epic tail of fraud, greed and all too little heroism -- founder Ken Lay died of a heart attack in Colorado at age 64.

Message boards are burning up over the news. Lay's critics (I admit, a tepid word to describe their pure hatred), are howling at the idea. They think that he somehow got off through his death. Many of them apparently don't believe it was a simple case of a heart attack. Some speculate there was foul play involved in his death. Some even believe that he faked his death through a stunt of some kind and has escaped authorities.

The truth is that Lay's death by heart attack shouldn't be too great a surprise. I'm no doctor and I know a massive coronary can strike the healthiest and certainly the most honorable people without warning. But could many people have been under more stress than Lay? Given his May 25 conviction, he seemed destined to live out the rest of his life behind bars. Sentencing was set for October 23. If he had been deluding himself that he would be found innocent during his trial, his conviction erased any hope.

Maybe Lay would have died of a massive coronary at age 64 even if Enron had stayed on the straight and narrow. And, if Ken Lay knew his fate was to die at that relatively young age, would he have risked his company and his legacy on fraudulent dealings?

To me, that is the most interesting question: If Ken Lay  had remembered how short life can be, would he really have wasted his time on earth causing so much pain and destruction?

For any other corporate leaders who about to slide down a slippery slope of fraud and corruption, his early demise provides a chilling lesson: Life's too short to be a crook.

 

It was a long time coming, but today's Enron verdict -- Ken Lay guilty on all six counts, Jeff Skilling guilty on 19 of the 28 counts he faced -- is a victory for all shareholders. Now it looks like these bozos are going to jail for a long, long time and they deserve it.

The thing is, I really thought they  might get off. Lay in particular seemed to be doing a good job acting like he wasn't party to the financial fraud. But now they are convicted felons and we see real proof that top executives can't get off while their lieutenants (many of whom have already pled guilty and served time) take all the heat.

The U.S. legal system doesn't always work and it takes a long time for the wheels of justice to turn. But in this case, at long last, the system worked.

The damage to the financial markets that was done back in late 2001 when Enron imploded still hasn't healed. There are other corporate scandals still simmering and more, no doubt, will surface.

But at least for today, investors can digest news of justice being done, breathe a sign of relief, and return to the markets with renewed confidence.