Wall Street Folly

Tags: AIG, Autos, CDS, Enron, GM, GMAC, Jeff Skilling, Politics, SCOTUS, Sovereign debt, TARP, Toyota, Wards of the State

Tags: AIG, Enron, Greece, Hedge funds, Jeff Skilling, John Paulson, Paulson & Co, SCOTUS

Tags: Apple, Books, Enron, Hamptons, Henry Paulson, iPad, Real Estate, TARP, U.S. Treasury

• Goldman Sachs Still Shines for MBAs Who Ignore ‘Hype’
• Soros, Citadel Hire Hedge-Fund Analysts From Galleon
• UBS Lays Out Employee Ethics Code
• Murdered Merrill Banker’s Wife Appeals Her Conviction
• Ex-Merrill Banker Bayly Won’t Be Retried in Enron Barge Case Read the rest of this entry »

Tags: Citadel, Convictions, Enron, Ethics, Galleon, George Soros, Goldman Sachs, Legal, MBA, Revolving Door, UBS

Former Enron CEO Jeffrey Skilling lost another round in his bid to have his case reheard.   The federal appeals court in New Orleans.  Next stop, the Supreme court, where he'll be appealing according to his lawyer Daniel Petrocelli:

Read the rest of this entry »

Tags: Enron, Jeffrey Skilling, Legal

At least 2 lawsuits have already been filed in what's being called India's Enron.

Read the rest of this entry »

Tags: Enron, Lawsuit, Satyam

Read the rest of this entry »

Tags: Citadel, Credit Crunch, Enron, FDIC, Hedge funds, Lehman Brothers

• SEC Rebuffs Lawmakers Over Bear
• Goldman, Morgan Stanley Hit `Level 3′ Jackpot: Jonathan Weil
• SEC Examining Whether Credit-Raters Changed Policies
• `NatWest 3′ Ordered to Report to Prison in Next Three Weeks

Read the rest of this entry »

Tags: Bear Stearns, Enron, Goldman Sachs, Morgan Stanley

Citigroup settled litigation filed by Enron creditors for $1.66 billion without admitting any wrong doing;  it had already set aside reserves so it sounds like good news, removing at least one uncertainty from their ugly balance sheet.  Now they just have to clean up their other shit.  (P.S. Meredith Whitney sharpened her pencil this morning and cut her Citigroup estimates again)

Citigroup Inc., the biggest U.S. bank by
assets, will pay $1.66 billion and give up an estimated $4.25 billion in claims
to settle a lawsuit by Enron Corp. creditors over the former energy trader’s
bankruptcy case.

The creditors, represented by Houston-based
Enron Creditors Recovery Corp., were seeking as much as $20 billion from New
York-based Citigroup. The bank is the sole remaining defendant in the 2003
lawsuit seeking to hold lenders liable for the roles they allegedly played in
the fraud that destroyed the company. Enron filed for bankruptcy in December
2001.

Citigroup, which didn’t admit or deny
wrongdoing, said funds for the settlement have already been set aside. As part
of the accord, Enron agreed not to challenge $2.4 billion in claims by holders
of credit-linked notes tied to Citigroup.

Citigroup Settles Enron Megaclaims for $1.66 Billion – Bloomberg

Read the rest of this entry »

Tags: Citigroup, Credit Crunch, Enron

• Hedge Funds Record Worst Month Since 2000 in January
• Goldman, U.S. Brokers May Earn 40% Less Profit, Bernstein Says
• GMAC’s ResCap Gets Credit Line, May Sell Resort Unit
• Natwest Three sentenced to 37 months each

Read the rest of this entry »

Tags: Enron, Goldman Sachs, Hedge funds

Sanity has prevailed.

Read the rest of this entry »

Tags: Bad Precedents, Bankruptcy, Enron, Legal

Ackman may target Sears NatWest Three snubbed by 35 former colleagues Short Trades Get More Costly As Hedge-fund Biz And LBOs Boom

Read the rest of this entry »

Tags: Activist Investing, Bill Ackman, Eddie Lampert, Enron, Hedge funds

Go directly to jail:  Enron CEO Jeff Skilling, who was supposed to report to his new prison digs on Tuesday but got a temporary reprieve while the court mulled over his request for bail pending the appeal of his conviction, now must report to jail:

A federal appeals court signaled that former Enron Corp. President Jeffrey Skilling might serve far less than the 24-year sentence given him earlier this year by a federal judge, even as it ordered Mr. Skilling to immediately report to prison.

The decision by the Fifth Circuit Court of Appeals turned down Mr. Skilling’s request for bail pending the appeal of his May conviction in a Houston federal court on 19 counts, including conspiracy and fraud. The decision came just a day after the court had temporarily delayed Mr. Skilling’s scheduled report date to a federal prison in Waseca, Minn. The criminal case against Mr. Skilling arose out of Enron’s December 2001 collapse into bankruptcy. Mr. Skilling has consistently maintained his innocence.

In its decision yesterday, the appellate court said that Mr. Skilling’s appeal was unlikely to result in the reversal of all 19 counts of his conviction. The former Enron chief executive will face some prison term. But exactly how long that prison term will wind up being became a bigger question, as the appeals court decision criticized a large swath of the verdicts against Mr. Skilling.

Court Faults Skilling Conviction But Orders Him to Report to Prison – Wall Street Journal

Tags: Enron, Jeffrey Skilling

Jeff Skilling, who was supposed to be reporting to his new prison digs today, was given a temporary reprieve in the start of his jail sentence from the appeals court who is considering granting bail pending the appeals process:

The Skilling attorney said that the notice he received said that the appellate court had granted the stay "solely to allow this court to give careful consideration to the request for bail pending appeal." Granting bail would allow Mr. Skilling to stay out of prison pending his appeal, which could take a year or more for the appellate court to consider.

"We are heartened that the court of appeals is taking the time necessary to decide this important motion," said Mr. Petrocelli.

Skilling’s Check-In To Prison Delayed ver Bail Request - Wall Street Journal

Tags: Enron, Jeffrey Skilling

Former Enron CEO Jeff Skilling is moving to his new home tomorrow –  a federal prison near Waseca, Minn., near Minnapolis — to serve his 24 years and four month prison sentence.  With a well known public intoxication bust, he’ll undergo alcohol and mental health counseling that could reduce his sentence by a year if he’s a good boy.  And good behavior could reduce his sentence by 54 days a year.

BusinessWeek describes his new digs. The facility is a former branch campus of the University of Minnesota.  He’ll be communing with lots of low level drug trade offenders but not many white collar crime types.  He’ll share a converted college dorm room meant for two with three other roomies:

The low-security prison, which sits on the city limits of this town of 8,400 people 75 miles south of Minneapolis, has a low profile in the federal penal system and is little known even to most Minnesotans. While the surroundings will pale in comparison to Skilling’s former high-flying lifestyle, former staff and inmates at the prison said there are worse places to land.

"For me, it wasn’t the worst experience," said the Rev. Chuck Butler, a retired Methodist minister from nearby Rochester. Butler spent three months in the prison in 2000 after several trespassing arrests for protesting on Georgia’s Fort Benning Army base.

"The food they served was actually quite good. It used to be a university extension site, so you’d walk into certain parts and immediately feel like you were on a college campus," he said.

Read the rest of this entry »

Tags: Enron, Jeffrey Skilling

Opening in Houston on December 1 for a six day run is "Enron — The Musical — The social satire of our time":

In two acts, six local actors each play up to 10 roles, including those of the former chief executives Kenneth L. Lay and Jeffrey K. Skilling, and the former finance chief Andrew S. Fastow. The songs are show-tune parodies — “Thank Heaven for Off The Books Deals,” for example, instead of “Thank Heaven for Little Girls.” The writer-director-producer is Mark Fraser, whose day job is selling janitorial supplies.

“I did a lot of research because even though it’s satire I wanted it to be factually correct,” said Mr. Fraser, adding that his sources included the memo in which an Enron vice president, Sherron S. Watkins, warned Mr. Lay about its accounting.

Read the rest of this entry »

Tags: Enron

With the death of Ken Lay, much to the government’s chagrin, his conviction was set aside and purged from his record since he didn’t have the chance to go through the appeal process.  The government wants to make sure that doesn’t happen in the future.  As a result,  the Senate introduced a new bill on Thursday which would end the practice of vacating convictions of defendants if they die before exhausting the appeals process.

The bill by Senate Judiciary Committee members Dianne Feinstein, a Democrat from California, and Jeff Sessions, a Republican from Alabama, was written with help from the Justice Department, which had sought changes after Mr. Lay’s death on July 5.

"We need to ensure that, in these types of cases, hard-won convictions are preserved and restitution remains available for the victims of crime," Ms. Feinstein said in a statement on the legislation.

Read the rest of this entry »

Tags: Enron, Ken Lay, Legal

Jeffrey Skilling, Enron’s former CEO, is bound for his new home — a low-security federal prison in Waseca, Minn — on December 12.  In other Skilling news, he’s settled the last litigation dispute by former Enron employees for $85 million.

The ex-CEO, who is slated to begin serving more than 24 years in prison next month, has withdrawn his opposition to an $85 million settlement that plaintiffs reached with former company directors and other executives two years ago.

In exchange, plaintiffs resolved claims against Skilling — the last named defendant who hadn’t settled — effectively bringing the litigation to a close.

"Yes, it’s over. Our clients are thrilled," said Lynn Sarko, an attorney who represents ex-Enron employees, today. "While they are grateful that some of their retirement money was recovered, it will never make up for the destruction of their retirement nest egg."

The lawsuit, which recovered about $265 million in settlements — including the $85 million held up by a Skilling appeal — was filed on behalf of more than 20,000 employees after Enron went bankrupt in December 2001. The Labor Department later filed similar litigation, which was folded into the main lawsuit.

Skilling, government agree on $85 million Enron deal – Houston Chronicle

Tags: Enron, Legal

Andy Fastow won’t be getting his top prison choice.  He requested that he serve his six year federal prison sentence in Bastrop, Texas (30 miles outside of Austin) and the judge made that recommendation.  But instead he’s been assigned to the Federal Detention Center in Oakdale, La, which is around 200 miles northeast of Houston.

The detention center is part of a prison complex that includes a low security correctional institution and a satellite prison camp that houses minimum security male inmates. The entire prison complex has about 2,400 inmates.

Enron’s Fastow Assigned to La. Prison – AP via MoneyCentral

Tags: Enron, Legal

Jeff Shankman, the former Enron global markets COO, is looking to raise as much as $250 million in the next six months to open an energy hedge fund according to Bloomberg sources who received marketing documents:

Trident Asset Management, founded this year by Shankman and Dallas-based Andy Weathers, a former trader at CenterPoint Energy Inc., will start trading this month, said the investors, who declined to be identified because details are still confidential. Shankman didn’t return messages left requesting comment. Weathers declined to comment.

Shankman, 39, headed trading in markets from commodities to foreign exchange and equities at Enron, the world’s largest energy-trading firm before it went bankrupt in 2001. Weathers worked at Duke Energy Corp., before trading energy at CenterPoint, Houston’s electricity distributor.

Shankman, Ex-Enron Executive, to Start Hedge Fund, People Say – Bloomberg

Tags: Enron, Hedge funds

Still proclaiming his innocence, and vowing to fight on, former Enron CEO Jeffrey Skilling was sentenced to 24 years and four months in prison.  If he were to serve his entire sentence, that would make him 76 years old when he’s freed.

“Your honor, I am innocent of these charges,” Skilling told U.S. District Judge Sim Lake. “I’m innocent of every one of these charges.

“We will continue to pursue my constitutional rights and it’s no dishonor to this court and anyone else in this court. But I feel very strongly about this, and I want my friends, my family to know that.”

Skilling, 52, also disputed reports that he had no remorse for his role in the fraud that led to Enron’s collapse in 2001, which wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.

“I can tell you that’s just the furthest thing from the truth,” he said. “It’s been very hard on me, but probably, more important, incredibly hard on my family, incredibly hard on employees of Enron Corp., incredibly hard on my friends and incredibly hard on the community.

“And I want my friends, my family to know this.”

Read the rest of this entry »

Tags: Enron, Jeffrey Skilling, Legal

As was widely expected, despite the U.S. government’s last gasp attempt to have congress change the law, Ken Lay’s conviction has been erased from his record.  In addition, his family has asked that the court release a $5 million bond secured by Ken Lay’s children’s homes.

A federal judge in Houston this afternoon wiped away the fraud and conspiracy conviction of Kenneth L. Lay, the Enron Corp. founder who died of heart disease in July, bowing to decades of legal precedent but frustrating government attempts to seize nearly $44 million from his estate.

The ruling worried employees and investors who lost billions of dollars when the Houston energy trading company filed for bankruptcy protection in December 2001. It also came weeks after Congress recessed for the November elections without acting on a last-ditch Justice Department proposal that would have changed the law to allow prosecutors to seize millions in investments and other assets that Lay controlled.

With the judge’s order, Lay’s conviction on 10 criminal charges will be erased from the record. "The indictment against Kenneth L. Lay is dismissed," U.S. District Judge Simeon T. Lake III wrote in a spare, 13-page order.

Read the rest of this entry »

Tags: Enron, Jeffrey Skilling, Ken Lay

Former Enron Finance chief Andy Fastow probably heaved a huge sigh of relief when the judge was merciful and gave him only a 6-year prison sentence rather than the 10-year sentence negotiated in his plea deal.  But it’s not over til it’s over.  The U.S. government is said to be considering an appeal:

In a filing this week, prosecutors asked the judge to give them immediate access to the sealed transcript of a Sept. 25 conference held in his chambers with Fastow’s attorneys and members of the Enron Task Force.

The Houston Chronicle has asked Hoyt to unseal the transcript of that conference, which occurred the day before Fastow’s sentencing.

Prosecutors said in a previous motion they supported the newspaper’s request to unseal, but in the filing Thursday asked for immediate access to the document.

"The government is currently assessing whether to file a notice of appeal of the sentence imposed on Mr. Fastow, and it cannot make that determination without a copy of the transcript of the pre-sentencing hearing," prosecutors said in the most recent court filing.

Prosecutors know what occurred in the conference since Assistant U.S. Attorney John Hueston was in the meeting, but transcripts of pertinent hearings are often part of an appeals filing. The government has until Oct. 26 to file a notice of appeal over the sentence.

‘Mercy’ given Fastow at issue – Houston Chronicle

Tags: Enron, Legal

The gods must like Andy Fastow.   His ten year plea agreement was trimmed to a comparatively slim six year prison sentence:

In imposing the sentence, U.S. District Judge Kenneth Hoyt in Houston complied with Fastow’s request for a lighter sentence than he had agreed to. Fastow pleaded guilty in January 2004 to one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud. When he made his deal, each count carried a maximum sentence of five years.

Fastow’s sentence came after he provided investors with a statement dated yesterday implicating Enron’s former banks in the fraud he orchestrated. Investors are suing Merrill Lynch & Co., Credit Suisse Group and other banks to recover $30 billion in stock losses caused by the fraud.

Fastow, Lead Architect of Enron Fraud, Gets Six Years in Prison – Bloomberg

Tags: Enron, Legal

According to the Houston Chronicle, Andy Fastow may get help from some unlikely allies in his quest for leniency at today’s sentencing hearing.

"(Fastow) makes it clear for all to see that not only did the Enron banks drive the getaway car in one of the greatest financial scandals in our nation’s history, but the Enron banks served as the actual masterminds behind the scheme to defraud," said Bill Lerach, lead attorney for the shareholders….

Attorneys for the shareholders say they will ask U.S. District Judge Kenneth Hoyt to shave some time off the former Enron finance chief’s expected 10-year sentence because of his help trying to build cases against the half-dozen banks that have not settled in the massive class-action lawsuit.

Read the rest of this entry »

Tags: Enron, Legal