What the CEO Knew or Should Have Known
By George Anderson
The conviction of former WorldCom chief executive Bernard J. Ebbers by a federal jury in New York on charges of fraud and conspiracy appears to take the “I didn’t know” defense off the table for others currently facing similar charges or those that may find themselves in court in the future.
Salina Strong, juror No. 4, told The Wall Street Journal, “I think Ebbers pretty much hung himself. How could he be up that high in a company that he started and then he says I didn’t know anything?”
If given the maximum for the crimes on which he was found guilty, Mr. Ebbers could face a sentence up to 85 years. The actual term is likely to be much less although, at the age of 63, it is possible Mr. Ebbers may spend the rest of his life in jail. He is expected to appeal.
Jacob Frenkel, a former enforcement attorney for the Securities and Exchange Commission who is now in private practice said, “This verdict is devastating for any other CEO or senior executive who intends to use the defense that ‘I did not know.’ ”
Moderator’s Comment: What effect will Bernard Ebbers’ conviction on federal fraud and conspiracy charges have on how other chief executives do their
Jacob Frenkel, said the jury’s return of guilty charges against Mr. Ebbers was like “a missile blowing that (‘I didn’t know’) defense out of the sky.” –
George Anderson – Moderator
- Verdict Is Warning to Other CEOs Of the Risks of Pleading Ignorance – The Wall
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