Thursday, January 27, 2005
Everyone is talking about the trials of Ebbers (Worldcom), Scrushy (HealthSouth) and Kozlowski (Tyco). The Atlanta Journal Constitution, in a website called "CEO Blotter: Corp Execs in Court" features the three trials. But overlooked is what is happening on the west coast. Yesterday the trial opened in the case of Richard Hawkins, a McKesson executive who is on trial for alleged conspiracy and securities fraud. According to law.com, "[f]ormer McKesson Corp. executive and convicted felon Albert Bergonzi took the witness stand Wednesday and described how he helped pull off a scam that led to a $9 billion investor loss -- one of the biggest in history."
According to Yahoo Finance's law com report,
In spring 1999, allegations of corporate wrongdoing soured the otherwise happy merger of San Francisco-based McKesson, touted as the world's largest health care management company, and Atlanta-based software maker HBO & Co.
The resulting scandal prompted a one-day stock drop that cost investors $9 billion and inspired a flurry of shareholder suits. Last week, McKesson agreed to pay $960 million to settle a federal class action, but numerous other suits remain. The government has also gone after several executives."
Like some of the other ongoing trials, the case involves individuals who plead guilty and are now testifying for the government. Credibility of these witnesses can be the essence of the case. As reported in law.com, "In an opening statement last week, one of Hawkins' lawyers, Orrick, Herrington & Sutcliffe partner Melinda Haag, characterized Bergonzi as a liar who is trying to help himself by dragging an innocent man down with him."