Current events…

May 26, 2006

Though footnoted.org regulars know that I rarely comment on other news stories, preferring to break news instead, yesterday’s decision on the Enron trial is simply too hard to pass on. On the one hand, it was great that jurors didn’t buy the same BS that jurors in the Richard Scrushy trial did. But to call this a victory for investors seems premature indeed. Need evidence? Just check out the daily list of subpoenas in the ever-growing options dating scandal, which the WSJ has been doing a fantastic job of reporting. With Memorial Day upon us, I’m betting some big-name company may very well disclose late today — say around 6 p.m., maybe later — that they’re now caught up in this widening scandal.

One person celebrating the Enron verdict this morning was SEC Chairman Chris Cox who sent out this email to his employees this morning:

From: Chairman Christopher Cox
Sent: Friday, May 26, 2006 8:35 AM
Subject: Congratulations

Yesterday’s guilty verdicts in Houston mark a milestone for our country, and certainly for this agency.  You should be proud to be a member of a team that has successfully brought enforcement actions that have obtained more than $400 million so far to benefit Enron’s victims.   The criminal trial was a success in no small part due to the tremendous assistance to the Enron Task Force provided by our staff.  Together, our agency efforts were responsible for uncovering extensive information during the SEC’s independent investigation.  The prosecutors used that information to build their case and ultimately to examine witnesses and present evidence during the course of the trial.    Our SEC team also shared valuable information from our independent investigation regarding fact and expert witnesses, and provided strategic advice and analysis.  As you know, during the trial, we were able to provide on-site consultation about details of the case.   This criminal verdict is but one of many results we can see everywhere around us, throughout the country, where you and our colleagues throughout the agency are truly making a difference.  Investors today are better protected for the example our agency has helped to set.  Congratulations, and thank you.   Chris

 
Not to take anything away from the folks at the SEC, many of whom work long and hard for a lot less money than they could make in the private sector. But to say that investors are better protected because of the Enron verdict, particularly in light of the options scandal, seems more than a bit premature.

I’ll be back on Tuesday with whatever skeletons were buried late today. Enjoy the holiday weekend. And try not to drink and read SEC filings at the same time! 

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