Saturday, October 7, 2006

Another Enron Executive Sentenced

Former Enron executive Paula Rieker received a sentence of 2 years probation for her guilty plea to a charge of insider trading for reaping nearly $500,000 from sales of stock when she knew the company was facing severe financial problems.  Rieker was among the eight former Enron officials who entered guilty pleas and later testified against former CEOs Ken Lay and Jeffrey Skilling in the conspiracy and securities fraud prosecution.  The government moved for a downward departure in the sentencing of Rieker, noting that she provided valuable evidence implicating Lay in givingmisleading information to analysts during 2001 about the prospects of Enron's broadband unit, a centerpiece of the government's case that Lay committed securities fraud.  Rieker was an executive in the investor relations department and then became corporate secretary, reporting directly to Lay.  Under the Sentencing Guidelines applicable to Rieker's offense, she was looking at an 18-24 month term, so the probation term means U.S. District Judge Melinda Harmon gave a substantial downward departure for her cooperation.  A Houston Chronicle story (here) discusses the sentencing. (ph)

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