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CNN Saturday Morning News
Sam Waksal Gets 7 Years in Prison for Insider Trading
Aired June 14, 2003 - 07:09 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COLLINS: ImClone's former CEO gets a seven-year prison sentence for insider trading, and the government is investigating dozens of other high-level cases of alleged white collar crime.
CNN's Chris Huntington reports on what may become of those accused in some of these corporate scandals.
(BEGIN VIDEOTAPE)
CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Sam Waksal's seven-year prison sentence for insider trading sends a clear warning to all the other executives targeted in the government's crackdown on corporate crime.
THOMAS AJAMIE, SECURITIES LAWYER: I would not want to be a white collar criminal these days. Think of Ivan Boesky. Ten years ago, Ivan got off with only three years prison time, and that was one of the causes celebres of the time. So the sentences are much stricter now.
HUNTINGTON: But while Waksal is headed to prison and Martha Stewart is headed to trial, there have been no criminal charges brought against WorldCom's former chief executive, Bernard Ebbers, nor Enron's former chairman, Kenneth Lay, and former CEO, Jeffrey Skilling.
JEFFREY SKILLING, FORMER ENRON CEO: And I have no knowledge of any wrong -- and had no knowledge of any wrongdoing...
HUNTINGTON: Sherron Watkins disagrees. The former Enron vice president who warned that Enron would implode in a wave of accounting scandals believes both Skilling and Lay deserve to be prosecuted.
SHERRON WATKINS, FORMER ENRON VICE PRESIDENT: If Martha Stewart can be charged for securities fraud, it sure looks like Ken Lay could be. I certainly would like to see Jeff Skilling charged, because I think he's the one that drove us over the cliff. Ken Lay, you know, idiot or criminal, those were his two choices. Neither one's very positive. I'd still probably put him in the idiot camp.
HUNTINGTON: A spokesperson for Lay says, "Ms. Watkins' comments are so outrageous and so contrary to her testimony under oath before Congress that Mr. Lay does not feel they merit a response."
Skilling's attorney tells CNN, "There is no case to bring against my client." For Bernard Ebbers, who ran WorldCom into the biggest bankruptcy in U.S. history, two recent investigations, one run by a former U.S. attorney general, the other by a former SEC enforcement director, find that Ebbers did know something of WorldCom's accounting fraud. But his attorney insists, "There is no persuasive evidence that suggests Bernie Ebbers was connected to any accounting impropriety at WorldCom."
One former prosecutor says to be patient, that the WorldCom and Enron cases cannot be expected to move as quickly as those against Waksal and Stewart.
STEPHEN RYAN, FORMER FEDERAL PROSECUTOR: I don't think it's fair to compare a relatively simple insider trader investigation with a big-time fraud like Enron.
There'll be millions of pieces of paper, dozens of witnesses to interview. So a complex investigation like Enron can take years.
HUNTINGTON: The Justice Department is currently working on at least 200 corporate fraud cases and has secured scores of indictments and several guilty pleas, including an indictment against WorldCom's former chief financial officer, Scott Sullivan, a guilty plea from David Duncan of Arthur Andersen, who oversaw the accounting at Enron, and nearly 100 criminal counts against Enron's former CFO, Andrew Fastow.
(on camera): There are eight federal prosecutors and nearly two dozen FBI agents working full-time on the Enron case. And if they're successful, Sam Waksal's time in prison will look like a brief layover. As one veteran prosecutor put it, "If Andrew Fastow is convicted, he'll be lucky to see his grandchildren graduate from college."
Chris Huntington, CNN, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired June 14, 2003 - 07:09 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COLLINS: ImClone's former CEO gets a seven-year prison sentence for insider trading, and the government is investigating dozens of other high-level cases of alleged white collar crime.
CNN's Chris Huntington reports on what may become of those accused in some of these corporate scandals.
(BEGIN VIDEOTAPE)
CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Sam Waksal's seven-year prison sentence for insider trading sends a clear warning to all the other executives targeted in the government's crackdown on corporate crime.
THOMAS AJAMIE, SECURITIES LAWYER: I would not want to be a white collar criminal these days. Think of Ivan Boesky. Ten years ago, Ivan got off with only three years prison time, and that was one of the causes celebres of the time. So the sentences are much stricter now.
HUNTINGTON: But while Waksal is headed to prison and Martha Stewart is headed to trial, there have been no criminal charges brought against WorldCom's former chief executive, Bernard Ebbers, nor Enron's former chairman, Kenneth Lay, and former CEO, Jeffrey Skilling.
JEFFREY SKILLING, FORMER ENRON CEO: And I have no knowledge of any wrong -- and had no knowledge of any wrongdoing...
HUNTINGTON: Sherron Watkins disagrees. The former Enron vice president who warned that Enron would implode in a wave of accounting scandals believes both Skilling and Lay deserve to be prosecuted.
SHERRON WATKINS, FORMER ENRON VICE PRESIDENT: If Martha Stewart can be charged for securities fraud, it sure looks like Ken Lay could be. I certainly would like to see Jeff Skilling charged, because I think he's the one that drove us over the cliff. Ken Lay, you know, idiot or criminal, those were his two choices. Neither one's very positive. I'd still probably put him in the idiot camp.
HUNTINGTON: A spokesperson for Lay says, "Ms. Watkins' comments are so outrageous and so contrary to her testimony under oath before Congress that Mr. Lay does not feel they merit a response."
Skilling's attorney tells CNN, "There is no case to bring against my client." For Bernard Ebbers, who ran WorldCom into the biggest bankruptcy in U.S. history, two recent investigations, one run by a former U.S. attorney general, the other by a former SEC enforcement director, find that Ebbers did know something of WorldCom's accounting fraud. But his attorney insists, "There is no persuasive evidence that suggests Bernie Ebbers was connected to any accounting impropriety at WorldCom."
One former prosecutor says to be patient, that the WorldCom and Enron cases cannot be expected to move as quickly as those against Waksal and Stewart.
STEPHEN RYAN, FORMER FEDERAL PROSECUTOR: I don't think it's fair to compare a relatively simple insider trader investigation with a big-time fraud like Enron.
There'll be millions of pieces of paper, dozens of witnesses to interview. So a complex investigation like Enron can take years.
HUNTINGTON: The Justice Department is currently working on at least 200 corporate fraud cases and has secured scores of indictments and several guilty pleas, including an indictment against WorldCom's former chief financial officer, Scott Sullivan, a guilty plea from David Duncan of Arthur Andersen, who oversaw the accounting at Enron, and nearly 100 criminal counts against Enron's former CFO, Andrew Fastow.
(on camera): There are eight federal prosecutors and nearly two dozen FBI agents working full-time on the Enron case. And if they're successful, Sam Waksal's time in prison will look like a brief layover. As one veteran prosecutor put it, "If Andrew Fastow is convicted, he'll be lucky to see his grandchildren graduate from college."
Chris Huntington, CNN, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
