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Former Enron executive faces up to 10 years in prison at sentencing for insider trading

Former Enron executive faces up to 10 years in prison at sentencing for insider trading

Prosecutors suggested they would ask for leniency at the sentencing of a former Enron executive who pleaded guilty to insider trading.
Paula Rieker, the former No. 2 executive in investor relations and later Enron Corp.'s corporate secretary, faced up to 10 years in prison at sentencing Friday.
Rieker, 52, pleaded guilty in May 2004 to insider trading for selling company shares in mid-2001 upon learning that Enron's broadband unit lost millions of dollars more than had been publicly disclosed.
She is among 16 ex-Enron executives who have pleaded guilty in the probe of the company's collapse. Andrew Fastow, Enron's ex-chief financial officer, was sentenced to six years in prison last month.
Prosecutors said Rieker provided "powerful and credible testimony" in the trial earlier this year of Enron founder Kenneth Lay and former CEO Jeffrey Skilling.
"As one example, she provided a credible and corroborated account of an effort by Skilling and others to manufacture an extra penny of earnings at the end of a reporting quarter," prosecutors Sean Berkowitz and John Hueston said in a court filing this week.
"Ms. Rieker was the first government witness to address broadly Mr. Lay's involvement in misrepresenting the true financial state of Enron," the court filing said.
Skilling and Lay were convicted in May of conspiracy and fraud. Lay's attorneys are working to erase his convictions since his July 5 death from heart disease. Skilling is to be sentenced Oct. 23.
Enron, once the seventh-largest company in the United States, crumbled into bankruptcy proceedings in December 2001 when years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable.
The collapse wiped out thousands of jobs, more than US$60 billion in market value and more than US$2 billion in pension plans.
At the trial of Lay and Skilling, Rieker told jurors that Skilling twice ordered that the company boost its reported earnings-per-share figures to meet or beat Wall Street expectations and support its stock.
She also testified that Lay painted a falsely rosy picture of Enron's financial health as CEO before and after Skilling held that post from February to August 2001.
In 2001, Rieker was the top lieutenant to Mark Koenig, former head of investor relations. She later switched to corporate secretary, maintaining minutes of board meetings. In that role, she answered to Lay.
Rieker stayed on Enron's payroll several months after the company filed for bankruptcy. She received US$130,000 in bonuses designed to entice needed employees to stay and signed papers that said she had not illegally traded stock.
She kept her job until early May 2002, when her name surfaced as a target in the Justice Department's Enron investigation. Two weeks later she pleaded guilty to insider trading.


Updated : 2021-04-17 07:28 GMT+08:00