Law Commons^™

Editor's Observations: The Sarbanes-Oxley Act And What Came After, Frank O. Bowman Iii

Faculty Publications

On December 2, 2001, the Enron Corporation filed the largest bankruptcy petition in U.S. history. Losses to investors, creditors, employees, and pensioners were in the billions. Criminal investigations are ongoing. On May 1, 2003, the U.S. Sentencing Commission passed a set of amendments to the U.S. Sentencing Guidelines that will, among other things, prevent a federal district judge from awarding a sentence of straight probation to a defendant convicted at trial of an $11,000 mail fraud. This Issue of FSR tells the story of how the first of these apparently unrelated events led to the second. Put another way, this …

Should Congress Repeal Securities Class Action Reform?, Adam C. Pritchard

Other Publications

The Private Securities Litigation Reform Act of 1995 was designed to curtail class action lawsuits by the plaintiffs’ bar. In particular, the high-technology industry, accountants, and investment bankers thought that they had been unjustly victimized by class action lawsuits based on little more than declines in a company’s stock price. Prior to 1995, the plaintiffs’ bar had free rein to use the discovery process to troll for evidence to support its claims. Moreover, the high costs of litigation were a powerful weapon with which to coerce companies to settle claims. The plaintiffs’ bar and its allies in Congress have called …

Enron, Titanic, And The Perfect Storm, Nancy B. Rapoport

Scholarly Works

This article explores the contention of Jeffrey Skilling, former Enron CEO, that Enron's debacle was due to a perfect storm of events. It rejects his contention, arguing instead that Enron's downfall was more like Titanic's - hubris and an over-reliance on checks and balances led to Enron's downfall. The article then explores how character (especially of those at the top of an organization) can lead to Enron-like disasters, and discusses how cognitive dissonance can lead to very smart people making very stupid decisions. It ends with some musings about how lawyers can learn from Enron.

Enron - When All Systems Fail: Creative Destruction Or Roadmap To Corporate Governance Reform?, Douglas M. Branson

Articles

This article raises the unthinkable proposition (for academics at least) that Enron may have been an aberration. The Enron debacle may have been the rare case in which nine, ten or more sets of monitors and gatekeepers failed. Alternatively, as with Tyco, WorldCom, Adelphia, Rite Aid or other celebrated corporate "busts," Enron may be the handiwork of one or two well placed wrongdoers, in this case, CFO Andrew Fastow. Enron then may not be the pathway to meaningful reform at all.

The article next proceeds to a critical review of Sarbanes-Oxley's principal provisions. The conclusion reached is that by and …

Competition, Corporate Responsibility, And The China Question, Jospeh Vining

Other Publications

"Corporate responsibility" is not a peripheral matter. It is at the core of all decision-making on behalf of business corporations under American law. This paper examines the effort to add an exemption for "business" in corporate form to the exemptions from ordinary responsibility that are seen in other areas of activity - e.g., for the military, for lawyers in adversarial litigation, or for investigators in scientific research. It looks at a number of well known cases and points to the often neglected relevance of both the criminal law applicable to corporations as such, and the evolving professional responsibility of corporate …

Risk Management And Organizational Governance: The Case Of Enron, Robert Eli Rosen

Articles

No abstract provided.