Come on BP...

Post #43,595 by Simon_Jester 6/27/02 2:17:49 AM Reply	Come on BP... Yes, you need evidence to convict, but there is more than enough evidence to bring charges - and none have been files against Enron or it's people. Yet - curiously enough, the SEC announced that it would bring fraud charges against Worldcom mere hours after Bush's speech. And, the issues are remarkable similar. WorldCom is being nailed (from what I see) for miscategorizing capital expenditures (which allowed it to overstate profits). Enron created pseudo-corporations to trade with to inflate the commodities they were trading in (and increase their profits).
Post #43,613 by bepatient 6/27/02 7:19:00 AM Reply	Yep. And Andersen will be out of business for destruction of the evidence that would have been needed to get convictions at Enron. There are loopholes that need to be closed in the way corps are allowed to do business. One is the language on reporting of subsidiary debt (Enron) and another is what you can qualify as reported revenue (Global Crossing). However...the Congresscritter didn't address those issues...only the ones that were already illegal. You were born...and so you're free...so Happy Birthday! _{Laurie Anderson} [link\|mailto:bepatient@aol.com\|BePatient]
Post #43,652 by Simon_Jester 6/27/02 1:38:03 PM Reply	Um...you do realize... And Andersen will be out of business for destruction of the evidence that would have been needed to get convictions at Enron. that Enron (itself) was...ahem...ALSO shredding documents. Lucky for the Bush administration, however, that the SEC has learned that they can press Fraud charges early on to prevent such destruction of documents.
Post #43,667 by bepatient 6/27/02 2:33:19 PM Reply	Yep again. I expect that at some point we'll see a conviction of someone from Enron. Probably on obstruction charges. Remember, though...that while crooked as hell...what Enron was doing was perfectly acceptable under the law (for the most part). What you would have to prosecute on would be the "reasonable assumption of risk" language that surrounds the reporting of investment income. With the right jury they might be able to get that to stick...maybe. Same with Global Crossing. They were selling and repurchasing the same product in different periods to up their (false) revenue figures. Legal...but not at all ethical. Those are the loopholes I mentioned that should be closed. You were born...and so you're free...so Happy Birthday! _{Laurie Anderson} [link\|mailto:bepatient@aol.com\|BePatient]
Post #43,680 by Simon_Jester 6/27/02 4:18:29 PM Reply	Yes and no.. Remember, though...that while crooked as hell...what Enron was doing was perfectly acceptable under the law (for the most part). What you would have to prosecute on would be the "reasonable assumption of risk" language that surrounds the reporting of investment income. Yes and no. The selling of resources to other pseudo-companies appears to be fairly legal, however the transfer of debt to other companies (that were basically extensions of Enron itself) and then not reporting same said debt (of held companies) seemed to questionable to a number of accountants/legal experts, iirc.
Post #43,681 by bepatient 6/27/02 4:29:25 PM Reply	The issue.. [link\|http://www.brook.edu/comm/policybriefs/pb97.htm\|url] The immediate accounting problem exposed by Enron's failure was the weak consolidation rule prescribed for highly leveraged "special purpose entities" (SPEs), or partnerships that were formed to carry out various projects whose assets and liabilities were not shown in Enron's balance sheet. Enron failed in part because of losses arising out of the many SPEs that it had created. The rule for some time has been that sponsors of an SPE need not consolidate it so long as outside investors contribute a majority of its capital and that investment constitutes at least 3 percent of the SPE's assets. Leaving aside the fact that Enron appears to have misled its auditor, Andersen, about the amount of outside investments in SPEs (thus wrongfully avoiding consolidation), it is now clear that the 3 percent test was much too weak. FASB has since rightly raised the threshold to 10 percent. Guess you're right in that there was a little bit of both going on. Still...there should be a full disclosure requirement, regardless of investement. The companies liability needs to be recognized and reported. You were born...and so you're free...so Happy Birthday! _{Laurie Anderson} [link\|mailto:bepatient@aol.com\|BePatient]

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