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Federal appeals court denies new trial for ex-Enron CEO

The US Court of Appeals for the Fifth Circuit [official website] ruled [opinion, PDF] Wednesday that errors in the prosecution's case against former Enron CEO Jeffrey Skilling [JURIST news archives] are harmless, denying Skilling a new trial. The court, however, went on to vacate the original sentence against Skilling and remand for resentencing due to lower court error. The appeals court said:

[The] five fraudulent schemes, which formed a large part of the basis for the Government's proof at trial, all represent efforts by Skilling and his coconspirators to manipulate Enron's reported earnings or conceal Enron's losses from the investing public with the intent and result of affecting Enron's stock price. Because they are supported by overwhelming evidence, we find that the honest-services instruction was harmless error beyond a reasonable doubt.
The court also said that the Pinkerton instruction [USLegal backgrounder] given to the jury was harmless error, and, therefore, Skilling "has no basis on which to challenge the remaining convictions." Skilling's lawyer has said he will continue efforts to overturn [BBC report] Skilling's convictions.

In June, the US Supreme Court [official website] ruled [opinion, PDF] in Skilling v. United States [Cornell LII backgrounder] that the "honest services" doctrine [18 USC § 1346 text] is not unconstitutionally vague [JURIST report] under a limited construction of the statute and that the district court adequately "detected and diffused" juror prejudice in the pre-trial publicity of Skilling. In February 2009, the Fifth Circuit denied [JURIST report] a petition for an en banc rehearing for Skilling after a three-judge panel upheld [JURIST report] his previous convictions and ordered him to be resentenced due to error in the lower court. Skilling's appeal was based on a previous Fifth Circuit ruling [JURIST report] that overturned convictions for other Enron executives based on "honest services theft" because they had acted in Enron's best interest by direction and did not profit from their actions. The panel ruled that Skilling's case differed from these previous rulings because "no one at Enron sanctioned Skilling's improper conduct" and because Skilling's compensation structure was aligned with Enron's earnings. In 2006, Skilling was convicted [JURIST report] of 19 counts of conspiracy, insider trading and securities fraud. He is currently serving a 24-year sentence. Skilling initially appealed [JURIST report] his conviction in September 2007 claiming prosecutorial and judicial errors.

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