http://blogs.law.harvard.edu/corpgov/2007/03/16/blogging-the-nacchio-trial/ Sponsored by the HLS Corporate Governance Program Fri, 10 Oct 2008 23:07:55 +0000 http://wordpress.org/?v=2.5.1 http://blogs.law.harvard.edu/corpgov/2007/03/16/blogging-the-nacchio-trial/#comment-197 Arthur Mboue Sat, 17 Mar 2007 19:05:22 +0000 http://blogs.law.harvard.edu/corpgov/2007/03/16/blogging-the-nacchio-trial/#comment-197 Under SOX of 2002, the fraud guideline has been boosted, guideline reductions like 'super acceptance' of guilt, plea bargain, coorperation with the prosecution, that were available to White Collar defendants are being cut back. Federal prosecutors now have limited discretion, to charge and accept guilty plea agreements to only serious and provable offenses. The dilemna is that sometimes it is difficult to assess the risk of convictions (also indictments)in the early stages of the government investigation and trial. But, the implementation of these SOX policies may create a new defense strategy for CEOs including QWest CEO Nacchio, which will shift liabilities from CEO suite to a low level manager office. In sum, we must remember that recent 'earthquake' fraud indictments, convictions and sentencings of super power, Kenneth Lay and Skilling, should serve to warn corporate America incluiding CEO Nacchio and others that the old abuses of excuses will not fly anymore. Judges, juries, prosecutors, regulators, media, Wall Street, shareholders, creditors and customers are holding CEOs to higher standards. Ignoring early financial and managerial warnings, aceepting suspect or overly up beat 'prophet' advises and shuting eyes to questionable practices in the company as long as profits keep rolling in and big paychecks keep checking in the CEOs mailboxes are no longer acceptable forms of management style and risk management. Arthur Mboue, MBA, JD, Adjunct faculty research fellow (affiliate) Under SOX of 2002, the fraud guideline has been boosted, guideline reductions like ’super acceptance’ of guilt, plea bargain, coorperation with the prosecution, that were available to White Collar defendants are being cut back. Federal prosecutors now have limited discretion, to charge and accept guilty plea agreements to only serious and provable offenses. The dilemna is that sometimes it is difficult to assess the risk of convictions (also indictments)in the early stages of the government investigation and trial. But, the implementation of these SOX policies may create a new defense strategy for CEOs including QWest CEO Nacchio, which will shift liabilities from CEO suite to a low level manager office.
In sum, we must remember that recent ‘earthquake’ fraud indictments, convictions and sentencings of super power, Kenneth Lay and Skilling, should serve to warn corporate America incluiding CEO Nacchio and others that the old abuses of excuses will not fly anymore. Judges, juries, prosecutors, regulators, media, Wall Street, shareholders, creditors and customers are holding CEOs to higher standards. Ignoring early financial and managerial warnings, aceepting suspect or overly up beat ‘prophet’ advises and shuting eyes to questionable practices in the company as long as profits keep rolling in and big paychecks keep checking in the CEOs mailboxes are no longer acceptable forms of management style and risk management.
Arthur Mboue, MBA, JD, Adjunct faculty research fellow (affiliate)

]]>