Quote:
Originally posted by Hank Chinaski
The thing I don't get with Worldcom or Enron or all them is that it seems the wrong people got blamed for the losses. We should expect CEOs to be greedy, we should expect outside accountants and lawyers to bend to greed and let the CEOs wreck the companies, but those companies all had big in house accounting and legal departments- those people had a duty to the shareholders to watch and protect and prevent- anybody know if the inhouse guys are in prison?
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Shame on you, Hank. Posting reruns.
The fact is, most of the in-house guys didn't see the deals that got Enron and Tyco and AIG in trouble (I'm not as familiar with the others). They were looked at wholly outside and at the highest levels in the company. Furthermore, the in-house lawyers are actually the least likely to spill. They can be fired and disbarred for revealing client confidences, and they can't sue their employers if they get fired for whistle-blowing. This was in the courts a few years back and the in-house lawyers lost.
On the other hand, the public acounting firms doing the deals had a public duty, at least with respect to their audit clients, to the shareholders and the markets. Outside counsel had an ethical duty under the Model Rules to not assist their clients in perpetrating fraud. The guys in the most trouble are the ones that should be.
