White-collar crime jury verdicts indicate that the public is fed up with corporate abuses, says the Christian Science Monitor. The latest evidence came on Monday when a federal jury found former investment banker Frank Quattrone guilty of obstructing a government investigation. Martha Stewart was found guilty on March 6 of lying to federal officials who were investigating an insider trading charge. Other cases are ongoing or will be taken to juries. A jury in New York is hearing the case against the Rigas family, accused of looting the assets of cable television operator Adelphia. On April 2, a mistrial was declared in the case against the executives of Tyco, Inc.; a retrial is expected. The government has indicted Bernie Ebbers – who headed up World Com before it went bankrupt – and Jeffrey Skilling, former CEO of Enron.
Some defense lawyers believe a “class war” is taking place. “You’re seeing the feeling that anyone with a title must be guilty,” says Jamie Wareham, a partner at Paul, Hastings, Janofsky & Walker in Washington, D.C. “There is a backlash against the super wealthy.” The Quattrone case, defense lawyers believe, is an example of this.
Changes are taking place in the securities laws to prevent abuses. New rules prohibit securities analysts from talking to the investment bankers involved in new securities offerings. During his trial, prosecutors presented evidence that Quattrone was involved in the allocation of some of the hot IPO shares. “Quattrone would not have had the same input today,” says a former prosecutor. “It’s all part of the attempted cleanup of the financial services industry.”