Monday
Mar232009
Enron Executive to Supreme Court: I’m being unjustly prosecuted
By Michael Ruhl, University of New Mexico – Talk Radio News Service
Today one of Enron’s former executives found himself back in the lime light as the Supreme Court heard his case of being unjustly prosecuted. F. Scott Yeager, an executive at Enron Broadband Services, was caught up in the hunt for white-collar wrongdoing after the Enron scandal. He was charged with wire fraud, securities fraud, insider trading, money laundering, and conspiracy to engage in securities fraud and wire fraud. The original trial saw Yeager acquitted of three of the charges, but the jury couldn’t agree on the charges of insider trading and money laundering.
The United States government then tried to re-try the insider trading and money laundering charges, since the jury was undecided on the matter, something that Yeager says violates his rights against being prosecuted twice for the same matter. Yeager moved to have the case thrown out. He argued that he is protected by collateral estoppel, which prohibits the same issue from being tried twice, and is similar to double jeopardy. Yeager’s legal team relied on a good-faith defense in his initial trial, saying he was not guilty because he had a reasonable belief in his company’s financial stability. The argument for collateral estoppel was that since he was acquitted based on the good-faith defense, it would not be possible to prosecute him on insider trading, since the jury established he could not have illegality at the heart of his actions.
Both the District and Circuit Courts denied Yeager’s motion to have the case thrown out. Yeager then took the matter before the Supreme Court, in Yeager v. United States.
The Justices were undecided in the courtroom about whether or not the acquittal on the similar charges was enough to remove Yeager from any shadow of wrongdoing. Justices Samuel Alito and David Souter felt that he might have been acquitted for other reasons than simply the good-faith defense, although it was self evident that they could not know with certainty why the jury did what it did. The counsel for the United States said that the jury should have said Yeager was not guilty on the two undecided charges if they really meant it. Chief Justice John Roberts showed concern at the effect this decision could have on the Seventh Amendment in the Constitution, which protects the right to jury trials. Roberts questioned whether or not retrial of the undecided charges would undermine the jury’s decisions in the acquitted charges. Although Justice Stephen Breyer did not display a firm position on the case at large, he did say that he can’t think of why this wouldn’t be a second trial, and why collateral estoppel should not apply.
The Court is expected to return a decision on this case in May or June of this year.
Today one of Enron’s former executives found himself back in the lime light as the Supreme Court heard his case of being unjustly prosecuted. F. Scott Yeager, an executive at Enron Broadband Services, was caught up in the hunt for white-collar wrongdoing after the Enron scandal. He was charged with wire fraud, securities fraud, insider trading, money laundering, and conspiracy to engage in securities fraud and wire fraud. The original trial saw Yeager acquitted of three of the charges, but the jury couldn’t agree on the charges of insider trading and money laundering.
The United States government then tried to re-try the insider trading and money laundering charges, since the jury was undecided on the matter, something that Yeager says violates his rights against being prosecuted twice for the same matter. Yeager moved to have the case thrown out. He argued that he is protected by collateral estoppel, which prohibits the same issue from being tried twice, and is similar to double jeopardy. Yeager’s legal team relied on a good-faith defense in his initial trial, saying he was not guilty because he had a reasonable belief in his company’s financial stability. The argument for collateral estoppel was that since he was acquitted based on the good-faith defense, it would not be possible to prosecute him on insider trading, since the jury established he could not have illegality at the heart of his actions.
Both the District and Circuit Courts denied Yeager’s motion to have the case thrown out. Yeager then took the matter before the Supreme Court, in Yeager v. United States.
The Justices were undecided in the courtroom about whether or not the acquittal on the similar charges was enough to remove Yeager from any shadow of wrongdoing. Justices Samuel Alito and David Souter felt that he might have been acquitted for other reasons than simply the good-faith defense, although it was self evident that they could not know with certainty why the jury did what it did. The counsel for the United States said that the jury should have said Yeager was not guilty on the two undecided charges if they really meant it. Chief Justice John Roberts showed concern at the effect this decision could have on the Seventh Amendment in the Constitution, which protects the right to jury trials. Roberts questioned whether or not retrial of the undecided charges would undermine the jury’s decisions in the acquitted charges. Although Justice Stephen Breyer did not display a firm position on the case at large, he did say that he can’t think of why this wouldn’t be a second trial, and why collateral estoppel should not apply.
The Court is expected to return a decision on this case in May or June of this year.
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7th Amendment, Chief Justice, Circuit Court, David Souter, District Court, Enron, Enron Broadband Services, F. Scott Yeager, John roberts, Justices, Michael Ruhl, Ruhl, Samuel Alito, Seventh Amendment, Stephen Breyer, Supreme Court, Yeager, Yeager v. United States, collateral estoppel, conspiracy, constitution, double jeopardy, fraud, good-faigh defense, insider trading, jury, jury trial, justice, michael, michael t ruhl, michaeltruhl, money laundering, prosecution, retrial, securities fraud, wire fraud in Frontpage 2, News/Commentary, Supreme Court
Supreme Court stops insider trading retrial of Enron executive
Since Yeager had been acquitted of the fraud charges, he argued, the jury must have found that he had not possessed insider information, and if he had not possessed insider information, it was impossible for him to have traded on the basis of such information.
Generally courts are not allowed to consider jury's motivations, but the lower courts had trouble reconciling his jury's acquittal on some charges with the deadlocking on others, since there were so many factors in common between the charges.
The Supreme Court decision, authored by Justice Stevens, said that courts can consider what a jury decided, but not what a jury failed to decide. In other words, the court must consider whether an insider trading charge would be allowed, taking into account only the earlier acquittal on fraud charges. Juries may have many reasons for deadlocking, and it is impossible to know why they did what they did.
Because the fraud charges were found by the lower court to be based on the same basis as the insider trading charges, the insider trading charges are now barred from prosecution. The Supreme Court decision did leave open a small door for a lower court to reconsider its analysis of the legal issues: if a lower court finds that it is possible to have committed insider trading and not fraud, a new trial may be possible.
The decision was 6-3. Justice Kennedy agreed with the majority on the Double Jeopardy interpretation, but wrote separately to say that the lower court must reconsider the legal analysis of the two charges.
The case was Yeager v. United States.