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.

David Friehling is only the second person to face criminal charges in the Bernard Madoff debacle. He served as Madoff's auditor from 1991 to 2008, though it's hard to say if they'll resume their relationship as cellies. For now, Friehling has only been charged (innocent until proven guilty, and such) with securities fraud, abetting investment adviser fraud and filing false reports with the SEC. On five of the six charges filed, he faces a 20-year maximum.

It's alleged that Friehling didn't conduct "meaningful" audits while in Madoff's employ, despite issuing reports saying that he'd done his job -- which paid close to $15,000 a month (no work for big pay . . . where do I sign up?). In particular, he's said to have not bothered to verify Madoff's business assets, revenue sources or bank accounts. This is no-brainer stuff for an auditor.

There were 210 securities fraud class-action lawsuits filed in 2008, a rise of 19% over 2007 and 80% over 2006, according to a report issued jointly Tuesday by Stanford Law School and Cornerstone Research.

The bulk of the rise in lawsuits can be explained by the writedowns that took place at nearly every financial company: The lawsuits allege that the firms overvalued their mortgage related assets. But more importantly, people are suing companies because they lost money on stocks: Anytime the market goes down, the number of lawsuits goes up.

What will come of these lawsuits? Probably relatively little: Banks will look to settle to avoid the expense and risk of litigation, lawyers will get richer and shareholders will get back a few pennies. Securities attorney Robert Giuffra Jr told (subscription required) The Wall Street Journal that "Plaintiffs lawyers will face an uphill battle if they claim that every bank on Wall Street was engaged in a separate internal conspiracy to commit economic suicide."

Do the banks deserve to be sued? Absolutely! But litigation seems unlikely to solve much here and the expense and distraction may even make things worse.

On Monday, shares of UAL Corp. NASDAQ: UAUA) tanked following a story on the South Florida Sun-Sentinel website stating that the company had filed for bankruptcy. It turned out that the story was a rerun of a 2002 piece, apparently posted on the website by mistake.

The Wall Street Journal reports (subscription required) that the Securities & Exchange Commission has launched an informal probe into the circumstances surrounding the dissemination of the story and subsequent price drop, in an attempt to determine whether it may have been a case of deliberate manipulation and foul play.

Tribune, the parent company of the South Florida Sun-Sentinel, has explained that the whole mess began when a single visit to the archived story early Sunday morning pushed the story onto its top business news page, where it was then picked up by Google News and Bloomberg.

That certainly doesn't sound nefarious, if it's the complete story, but it is a little scary: one night owl Googling old news stories can start a domino effect leading to national media outlets reporting the bankruptcy of a billion dollar company?

MAJOR PAPERS:

• The Wall Street Journal's "Fund Track" reported that some banks struggling to raise capital may sell their money management units. National City Corporation (NYSE: NCC) is selling its Allegiant Funds, Fifth Third Bancorp (NASDAQ: FITB) is considering selling its Fifth Third Asset Management, and KeyCorp (NYSE: KEY) will possibly sell its Victory Capital Management unit.
• The Wall Street Journal also reported that Andrew Cuomo, the New York state Attorney General, is preparing to file civil securities-fraud charges against UBS AG (NYSE: UBS), possibly as early as this week. Sources said the lawsuit may include allegations of malfeasance by senior UBS executives.

WEB SITES:

• Bloomberg reported that money manager John Paulson, the owner of Paulson & Co., is launching a hedge fund that will provide capital to financial firms which have been damaged by the housing crisis. Paulson, who wants to open the fund by December, used bets against the U.S. housing market to help him earn $3.7B in 2007.
• After U.S. lawmakers reached a deal on legislation to alleviate the housing recession, the House of Representatives will today vote on a rescue plan for Fannie Mae -- Federal National Mortgage Association (NYSE: FNM) -- and Freddie Mac -- Federal Home Loan Mortgage Corporation (NYSE: FRE). Representative Barney Frank said that the package, which increases the likelihood Treasury Secretary Henry Paulson will get the authority to inject capital into the two, is "fully acceptable," Bloomberg reported.
• Oil trading losses forced SemGroup LP, which used to be America's 12th largest private company, to declare bankruptcy yesterday. Reuters noted that SemGroup LP's parent company is SemGroup Energy Partners LP (NASDAQ: SGLP).

Thanks to Gary Weiss' blog for bringing this one to my attention.

Beverlee Kamerling, 63, and her son, Nicholas Alexander, 22, have been indicted on 21 counts related to a large securities fraud scheme.

The pair, along with six others, allegedly took control of 6 companies (including America Asia Energy, Coattec Industries Inc., Detex Security Systems Inc. and Global Gaming Network Inc.), issued false and misleading press releases about the companies and engaged in fax blasts to promote the shares.

Of course, while all this happened they were also, allegedly, selling unregistered securities.

Real creative, mama and baby. That's only been done about 11 million times.

I've always wondered why more women don't seem to get involved in securities fraud -- it's possible that it's just a reflection of the fact that Wall Street is still mainly male-dominated. Or perhaps, women are just more honest.

In any case, we can chalk this one up as a victory for equal opportunity securities fraud. And it is heartwarming to see mother and child bonding over the bilking of penny-stock players.