Jackal Time

Mergers and acquisitions, commercial loans, IPOs, bonds, fraud: Yes, fraud may be the new Wall Street profit center if two judges of the US Court of Appeals for the Fifth Circuit have their way. They ruled that the banks were immune from liability despite participating in and profiting from Enron's myriad fraudulent schemes.

Enron was the most spectacular corporate fraud in a time of jackals. Kenneth "Kenny Boy" Lay and his cohorts cooked the books, cashed out more than $1 billion in holdings and bilked hundreds of thousands of small investors out of their savings. Some executives were found guilty and are serving time. Led by the University of California Regents, investors sued the executives, accountants and banks involved in defrauding them.

Mervyn "Buddy" Schwartz worked for thirty years as a mechanic on the Hershey candy company assembly line. When he retired, his son, a financial adviser at Merrill Lynch, told him that Merrill was touting Enron. So Buddy invested heavily in the company. When Enron collapsed, he lost it all. Gone was the plan for a retirement place in Arizona with his wife. Gone were the small funds he hoped to leave his grandchildren. He joined the shareholders suit, hoping to recover something from those who concocted the schemes that helped Enron cook its books. To avoid embarrassment, several of the banks settled with the plaintiffs.

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