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Lay, Skilling Convicted in Sweeping Enron Verdict

The former top two officials at the failed energy giant Enron were convicted of fraud and conspiracy Thursday for their role in the company's 2001 financial collapse. Guests analyze the verdict and possible implications for the business world.

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    For some further analysis of the trial and its implications, I'm joined by Samuel Buell. He was a member of the Enron task force until 2004. He's now a visiting professor at the University of Texas-Austin School of Law.

    And Jeffrey Sonnenfeld is with us, associate dean of executive programs at the Yale School of Management.

    Professor Buell, you were on the government-created task force that looked into how the seventh-largest company in the country collapsed. Do you feel that justice has been done by these verdicts?

    SAMUEL BUELL, Former Member of Enron Task Force: Well, Ray, I think we need to take a step back today from the horserace coverage of this trial that's largely dominated the Enron story this year and remember where we were in the fall of 2001.

    The collapse of Enron was really the 9/11 for the financial markets. And it presented a very serious question for our legal system; that is, could corporate activity be structured at such a level of arcane complexity that it was beyond the reach of our legal system to sort it out?

    And that was really the question that Enron always presented, and that's why it took four years to unravel this case, take it apart, put it back together again, and figure out a way to simplify it, and make it clear, and explain it to a jury.

    And what we saw today was a resounding answer from this jury that, yes, our legal system is capable of sorting out even the most complex activities, and no level of specialization, no level of resources devoted to complex accounting is going to put a company's finances beyond the scrutiny of our legal system.

    So I think, in that sense, it's a tremendous victory for both our legal system and for investors.


    So if I understand you, you're saying this verdict refutes the idea put forward, for instance, by Mr. Skilling that nothing illegal was going on but it was just so complicated that normal people couldn't understand it?


    Certainly, that's so. I mean, we've heard comments from the jurors all afternoon that they sifted through the evidence piece by piece, they took it witness by witness, but ultimately they saw that this all fed up into a consistent theme, and that is an effort, systematically across this company, to present one picture when the reality was something very different.

    And, in that sense, at the end of the day, again, you had to take apart this very complicated machine and put it back together again. But at the end of the day, when it got down to the question of sort of motive, why were they doing all of this, it was really quite simple.