16 Oct

Mark Cuban Wins Big Against the SEC

Almost four years ago, I wrote an article for AOL’s Daily Finance site about the Securities and Exchange Commission witch hunt against Mark Cuban.

The SEC filed insider trading charges against him in 2008 after he sold 600,000 shares of stock in Mamma.com. They said that he was insider trading because he sold his shares after receiving information that there was going to be another offering of stock by the company.

Mark Cuban didn’t ask for the information on the stock offering. It was provided to him because the company wanted him to invest more money. He didn’t want the information, and he knew that it would devalue the stock he already held. So Cuban declined and sold his stock. The stock then dropped in value, and in ran the SEC. Read More

31 Jul

Barry Minkow Sentenced to Five Years’ Imprisonment on Stock Manipulation Conspiracy

United States Attorney’s Office
Southern District of Florida
July 21, 2011 Press Release

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that defendant Barry Minkow, 44, of San Diego, California, was sentenced today on one count of conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371, for his participation in a scheme to manipulate the stock price of Lennar Corporation (Lennar) through false and misleading statements about Lennar’s business operations and management. At today’s hearing, U.S. District Court Judge Patricia A. Seitz sentenced Minkow to five years in prison, to be followed by three years of supervised release. In addition, the Court ordered Minkow to pay $583,573,600 in restitution. Read More

30 Nov

This Is Why I Do White Collar Criminal Defense Work

I read a very interesting article yesterday on NYTimes.com, by John Kinnucan of Broadband Research. The FBI “invited” him to wear a wire and essentially entrap clients. He said no, and he told his clients about the FBI’s request. Of course, some are skeptical about his FBI story, but it makes for interesting reading and raises some good points pertinent to my forensic accounting practice.

Some may say that if Kinnucan was innocent, he should have just worn the wire to prove he was on the up-and-up. His article explains that it wasn’t quite so simple. The FBI said they believe Kinnucan and his clients were guilty, and they threatened to arrest him immediately. Read More

08 Sep

Jeffrey Skilling of Enron fame asks for a new trial

Jeffrey Skilling, the former CEO of Enron is appealing his federal conviction and arguing that his 24 year sentence is unconstitutional. In May 2006, Skilling was convicted of 19 counts of fraud, conspiracy and insider trading in the Enron case. The former chairman of Enron, Kenneth Lay, was convicted of many counts in the same trial, but died several weeks afterward.

The appeal cites many arguments, including:

  • Not moving the trial out of Houston was unfair to Skilling, as the community was outraged and “thirsting for vengeance”
  • The jury selection process was flawed
  • The 24 year prison sentence is not consistent with federal sentencing guidelines and statutes
  • The an executive shouldn’t be held liable for defrauding an employer when his acts are intended to benefit the employer

In December, Skilling asked for bail while his appeal was pending. The Fifth Circuit, which will hear the appeal, denied bail but suggested that some of the conviction counts may be reversed.

23 Oct

Jeffrey Skilling Gets a Long Prison Sentence

Today a federal judge sentenced former Enron executive Jeffrey Skilling to 24 years and 4 months in prison for his conviction on federal charges of conspiracy, fraud and insider trading. Skilling, 52, was also fined over $18 million for his crimes. He was denied bond while waiting to report to prison, and instead is on home confinement.