January 14, 2011
After being indicted in 2002 by a federal grand jury, Andrew Fastow pleaded guilty on January 14, 2004, to two counts of conspiracy to commit securities and wire fraud. A key player in the Enron scandal, Fastow, who faced 98 counts, agreed to serve a ten-year prison sentence, forfeit $23.8 million in assets, and cooperate with the government’s investigation.
At the time the highest-level defendant to be charged, Fastow entered his plea to Judge Kenneth Hoyt at U.S. District Court in Houston, Texas. According to Deputy Attorney General James B. Comey, the head of President Bush’s Corporate Fraud Task Force:
As one of the masterminds behind a massive fraud scheme, Andrew Fastow constructed an elaborate wall of deceit – shielding the reality of Enron’s failing business from the watchful eye of shareholders and the investigating public. Today’s plea tears that wall down.
Considered to be one of the greatest corporate scandals, the fall of Enron registered with the American public both on the political level (the manipulation of deregulated energy markets) and on the personal level (the loss of employees’ retirement funds).The incident’s ringleaders—Fastow, Kenneth Lay, and Jeffrey Skilling—became, for many, symbols of corporate greed, inspiring books, films, and even a Broadway play.
Congress passes legislation to close the “Enron Loophole.”
Like the Sarbanes-Oxley act, additional legislation has been passed in the wake of the Enron and other corporate scandals of the decade. In September 2007, Senator Carl Levin introduced Senate Bill S. 2058, which gave federal regulators more power to prevent market manipulation, thus closing what had become known as the “Enron Loophole.”
Though vetoed by President Bush, the bill passed on June 18, 2008. According to Levin, the bill aimed to “stop speculators from using unregulated energy markets to game the system and distort energy prices in ways that hurt consumers.”