Business and Tax Lawyer Blog

Enron litigation continues - resulting in a unanimous US Supreme Court ruling. In a 9-0 vote, the United States Supreme Court curtailed an anti-fraud law that makes it a crime to deprive the public or shareholders of the "intangible right to honest services." In an opinion written by Justice Ruth Bader Ginsburg, the Supreme Court said the anti-fraud law could only be used against bribes and kickbacks. The Court rejected the government's position that the law included self-dealing for no financial gain. As a result of the high court's ruling, part of the convictions against Jeffrey Skilling (former Enron executive) and Conrad Black (former media tycoon of Hollinger International, which once owned the Chicago Sun-Times) were set aside.

Washington defense lawyer Timothy O'Toole said that before the Court's decision the law was considered a general dishonesty-crime law and anything that seemed unethical or sleezy could become a part of a case. With the new ruling, defense lawyers predict that prosecutors may have a harder time winning convictions when money did not change hands or where gifts are not tied to legislative actions. Previously, the law had been a prosecutorial tool that was used to fight corruption, especially among lobbyists. Critics of the Supreme Court's ruling said this tool has now been detrimentally transformed. Daniel Petrocelli, a Los Angeles attorney representing Skilling, said the Court's ruling has paved the way for Skilling's complete exoneration and release from prison. In 2006, Skilling was convicted of 19 counts of fraud, conspiracy and other offenses that prosecutors say helped destroy Enron. To read more details on the Supreme Court's decision see Justices limit scope of anti-fraud law, 9-0.