Sunday, November 18, 2007

The Law Is An Ass-4

"I've dedicated my career to holding powerful corporations accountable when they victimized innocent people. ... Two weeks ago, I pleaded guility to a conspiracy charge involving payments made to plaintiffs in lawsuits against major corporations. ... Prince and O'Neal have admitted to 'mistakes' and 'flawed risk models.' These 'mistakes' and 'risks' are reminiscient of those of Andrew Fastow, Kenneth L. Lay and the other Enron boys in their 'structured' 'off balance sheet' deals-contrivances that were really designed to put shareholders are risk while lining the insiders' pockets. ... It's way of life in American executive suites, aided and abetted by lax regulations and politically compromised regulators at the [SEC]. ... The real frustration is that there's so little that can be done. ... The CEO-and-director club knows that pro-business judges in the corporate haven of Delaware and elsewhere in the legal system will protect them. ... The government--forget it. The SEC, and even Congress, appear to be getting ready to cut back shareholder rights and court access even more. And the Justice Department is busy defending waterboarding and targeting Democratic activists. Why do you think corporate bigwigs behave so badly so often? ... It turns out that the legal system is a lot tougher on shareholder lawyers than it appears to be on Wall Street executives", William Lerach (WL) at the Houston Chronicle, 18 November.

I've said before the Justice Department (DOJ) had millions of dollars and seven years to prosecute WL and has done nothing to Citigroup executives. Wait you say, the billions of writeoffs were last month. So? When did Uncle Sam first learn they were coming? Why Did Hank Paulson (HP) become Treasury Secretary on 10 July 2006? Is HP an accessory after the fact, 18 USC 3 to securities fraud? Or is he a principal under 18 USC 2 as an aider-abettor?

As a condition of going public, SEC registrants should be able to be sued in any federal district court in which they operate, similar to criminal conspiracy venue provisions, which case can be tried in any federal district court in which it is alleged an overt act furthering the conspiracy took place, or RICO's at 18 USC 1965. Why Delaware's courts should hear shareholder cases is beyond me. Shareholders will miss WL, with all his flaws. I never saw how what WL was charged with harmed shareholders of any company he sued. Who was the supposed victim of WL's "crimes"? See my 12 September and 29 October posts.

No comments: