The Supreme Court restricted a favorite tool for pursuing corrupt politicians and self-dealing corporate chiefs, ruling that the law that makes it a crime to deprive the public or one’s employer of the “intangible right of honest services” can only be used where they could prove defendants accepted bribes or kickbacks. It means, for instance, that Enron ex-CEO Jeff Skilling’s conviction on the “honest services” law is thrown out – but not the other charges he was convicted of. Law Professor Elizabeth Nowicki, both a former SEC attorney and Wall Street lawyer, says the opinion finally gives some insight into newly appointed Justice Sonia Sotomayor’s view on business fraud.
“Surprisingly, she sided with the justices who struck down the ‘honest services’ doctrine for vindicating cases of overt fraud. This is a troubling blow for those who care about protecting investors and business integrity.”
Contact Elizabeth Nowicki, 518-867-5355, firstname.lastname@example.org
Convicted Enron CEO Jeff Skilling will get the chance to appeal to the U.S. Supreme Court his federal conviction on conspiracy, securities fraud, insider trading, and lying to auditors. Law Professor Tamar Frankel, an authority on securities law and legal ethics, says it shouldn’t matter whether a manager directly or indirectly benefited from a wrongful act.
“Managers command enormous power derived from other people’s money. With power comes responsibility. With performed crimes comes criminal responsibility.”
Contact Tamar Frankel, 617-353-3773, email@example.com