Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, June 18, 2009

Former Enron Broadband CEO Settles Insider Trading Charges

Enron never seems to go away -- the SEC announced that, on June 15, 2009, the U.S. District Court in Houston entered a final judgment in the Commission's pending civil action against Joseph Hirko, former Chairman and Chief Executive Officer of Enron Broadband Services ("EBS"). On May 1, 2003, the Commission charged Hirko and other EBS executives with securities fraud and insider trading. Without admitting or denying the allegations in the Commission's complaint, Hirko has now agreed to be permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, to be permanently barred from serving as an officer or director of a public company, and to pay a $1 million civil money penalty.

The Commission settled this action in coordination with the Department of Justice, which entered into a plea agreement with Hirko on related charges in October 2008. In the criminal action, Hirko agreed to forfeit $7 million that, along with the Commission's disgorgement and civil penalties, will contribute over $8 million for the benefit of injured investors through the Commission's Enron Fair Fund.

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