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.

Continue reading Former Enron exec set free

Former Enron exec set free originally appeared on BloggingStocks on Wed, 21 Oct 2009 16:40:00 EST. Please see our terms for use of feeds.

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.

Continue reading Madoff bean-counter pleads not guilty

Madoff bean-counter pleads not guilty originally appeared on BloggingStocks on Sun, 19 Jul 2009 16:00:00 EST. Please see our terms for use of feeds.

Securities fraud lawsuits on the rise originally appeared on BloggingStocks on Tue, 06 Jan 2009 15:30:00 EST. Please see our terms for use of feeds.

SEC opens inquiry into UAL bankruptcy report originally appeared on BloggingStocks on Fri, 12 Sep 2008 07:00:00 EST. Please see our terms for use of feeds.

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.

• 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).

Newspaper wrap-up: Some banks consider selling money management units originally appeared on BloggingStocks on Wed, 23 Jul 2008 08:50:00 EST. Please see our terms for use of feeds.

The 2005 collapse of Refco, one of the largest commodities brokers in the world, was fast and furious. One day it was a high-flying IPO perfect for those who missed out on the CME Group (NYSE: CME) run-up (that ended up continuing). Then it went bankrupt after disclosing hidden losses and concealed debt. The whole mess unraveled in about a week.

On Friday, 59-year old former chairman and CEO Phillip Bennett pleaded guilty to a 20-count indictment including charges of conspiracy to commit securities fraud, wire fraud, bank fraud, money laundering, and making false filings to the Securities and Exchange Commission.

He is likely to spend the rest of his life in prison and also has to turn over $2.4 billion in assets to the government, which could make it tough for him to afford granola bars at the prison canteen. In 2006, the company's art collection was sold by Christie's to raise money for the creditors.

Mr. Bennett is currently confined to his New Jersey home while he awaits sentencing.

Former Refco CEO pleads guilty -- could spend life in jail originally appeared on BloggingStocks on Sat, 16 Feb 2008 14:40:00 EST. Please see our terms for use of feeds.

Mother and son indicted for securities fraud originally appeared on BloggingStocks on Fri, 07 Dec 2007 16:51:00 EST. Please see our terms for use of feeds.

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.

Best & Worst: Enron's ugly end game: Skilling's sentencing, Lay's untimely death originally appeared on BloggingStocks on Thu, 14 Dec 2006 18:00:00 EST. Please see our terms for use of feeds.