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How Jeff Skilling’s Case Affected White Collar Crime Since Enron

The former Enron CEO’s case had ramifications for the prosecution of white collar crimes.

Jeff Skilling
Former Enron CEO Jeffrey Skilling is escorted from the federal courthouse Friday, June 21, 2013, in Houston after being re-sentenced for his role in the energy giants’ collapse.

Former Enron executive Jeffrey Skilling is out of prison. The Federal Bureau of Prisons says the former CEO has been sent to a halfway house in Texas.

Skilling was convicted on multiple counts of fraud and insider trading in connection with the collapse of the Houston-based energy giant. The Enron Corporation ultimately went bankrupt after it was revealed Skilling and his staff of executives had used accounting loopholes, poor financial reporting, and what were called “special purpose entities” to hide billions in debt, and then pressured auditors to ignore it all.

After it all came crashing down, employees and shareholders lost billions, and the auditor eventually went out of business. Skilling was sentenced to 24 years in prison; that sentence was later reduced to 14 years. He was also fined $45 million. 

While the Enron scandal was disastrous for the company, its employees, its shareholders, and its auditor, it did lead to new regulations and new legislation – most notably the Sarbanes-Oxley Act, which raised penalties for defrauding shareholders, or destroying or altering records, and established stronger regulations to ensure auditing firms’ independence.

Skilling’s case has had wider ramifications for how white collar crimes have been prosecuted in the years since. In the audio above, David Kwok, assistant professor at the University of Houston Law Center, explains how to Houston Matters host Craig Cohen.

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