Sunday :: March 07, 2004
Why Was Martha Stewart Prosecuted?
by TChris
snip
As the Times points out, Stewart was essentially convicted of lying about a stock trade that saved her about $45,000. Small potatoes compared to the allegations made against Tyco's Dennis Kozlowski, Enron's Jeffrey Skilling or WorldCom's Bernard Ebbers, who reportedly "defrauded investors, stole tens of millions of dollars or drove their companies into the ground, or some combination of the three."
snip
Ms. Stewart's supporters have contended that the decision to prosecute her was motivated by the desire to take down a popular and very public female chief executive. Some say she became a target for prosecution because she supported members of the Democratic Party; others say she simply was not part of an old-boy network.
snip
Mary Becker, a law professor at DePaul, says Stewart was "a wonderful target to show that the administration is serious about fraud. ... Lots of publicity doesn't disturb any of the old boys or anybody who made a significant amount of money."
http://talkleft.com/new_archives/005557.htmlHere's some info from forensic accountants on some of the questionable things that Ken Lay allegedly did at Enron.
Learning from the Enron Case
By Steven D. Grossman, Ph.D., Associate Professor, Texas A&M University; Nicholas G. Apostolou, DBA, DABFA, Cr.FA, CPA, Louisiana State University, Department of Accounting; and D. Larry Crumbley, Ph.D., DABFA, Cr.FA, CPA, Louisiana State University, Department of Accounting
snip
When Jeffrey K. Skilling suddenly resigned on Aug. 14, 2001, a clear red flag, the company’s chairman, Kenneth L. Lay, retook the job saying, “absolutely no accounting issue, no trading issue, no reserve issue, no previously unknown problem issues” were behind the departure. On Aug. 21, Mr. Lay sent an e-mail to employees, reassuring them about the stability of the company and concluding, “one of my highest priorities is to restore investor confidence in Enron. This should result in a significantly higher stock price.”
On Aug. 22, Ms. Sherron Watkins, a vice president of corporate development, met with Mr. Lay and gave him a seven-page letter in which she said that Enron may be an “elaborate accounting hoax.” In an online chat with employees on Sept. 26, Mr. Lay said that Enron stock is a good buy and that the company’s accounting methods are “legally and totally appropriate.”
On Oct. 16, Enron reported a third-quarter loss of $618 million. One day later, the company reduced shareholder equity by $1.2 billion to account for transactions involving Enron and some partnerships created by Andrew S. Fastow, Enron’s chief financial officer. On Oct. 22, the Securities and Exchange Commission opened an inquiry into the partnerships. On Oct. 23, in a conference call, Mr. Lay reassured investors that there was no conflict of interest resulting from the transactions with the partnerships. Directors, he stated, “continue to have the highest faith and confidence” in Mr. Fastow. The next day, Mr. Fastow was fired.
(more)
http://www.acfei.com/ce-enron-case.php