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Non-Tech : The Enron Scandal - Unmoderated
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To: stockman_scott who wrote (2216)6/25/2002 6:23:07 AM
From: The Duke of URL©  Read Replies (1) of 3602
 
Great Post- Says it all.

Bad 1995 Law Helps White Collar Crooks
Even if corporate evildoers are not successful in leveraging the FBI's interest in them, they will still find plenty of protection against angry creditors in a 1995 law.
The law, passed as part of the GOP's 1994 Contract With America, is called the Public Securities Litigation Reform Act of 1995. The measure was vetoed by President Bill Clinton but was overridden in the Republican-controlled Congress and became law.

In a nutshell the PSLRA raised the bar for class action plaintiffs seeking civil recovery from the likes of Ken Lay et al. The law did so by reversing the civil law's natural order.

Under traditional civil statutes, bilked shareholders could sue...

If these laws suits had been allowed, Enron and AA would never have thought they could get away with what they did. Unfortunately there are a thousand other "Enrons".

ANY competent attorney has spotted the problems 10 years ago, the corrections would have been routine and relatively minor, thousands of shareholders would not have been fleeced, but more importantly, the integrity of the capital allocation mechanism in the country would not have been jeopardized and this bubble crash would have been much less pronounced.
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