Risk Management

Ex-Enron Exec Gets Probation

More than a week after Fastow's sentencing, Paula Rieker is the second former Enron heavy to receive lenient sentencing.
Sarah JohnsonOctober 6, 2006

On Friday onetime Enron managing director of investor relations Paula Rieker was sentenced to two years’ probation for insider trading, according to the Associated Press.

Prosecutors had requested a reduced sentence for Rieker based on her cooperation with authorities during the investigation into the fraud that pushed the former energy giant into bankruptcy, the wire service says. She could have been sentenced to as much as 10 years in prison. “As one example, she provided a credible and corroborated account of an effort by Skilling and others to manufacture an extra penny of earnings at the end of a reporting quarter,” prosecutors Sean Berkowitz and John Hueston said in a court filing this week, according to the AP.

In 2004 Rieker, now 52, pleaded guilty to one count of insider trading after learning three years earlier that Enron had lost millions of dollars more than it had revealed to investors, the AP reported. She forfeited roughly $500,000 in trading profits to the government and surrendered a $130,000 retention bonus.

During the trial of Enron founder Kenneth Lay and former chief executive Jeffrey Skilling, held earlier this year, Rieker — who once reported to director of investor relations Mark Koenig and also served as Enron’s corporate secretary — testified about how the company transferred losses between departments and kept material information from analysts and investors.

Assisting prosecutors with their case against Lay and Skilling also helped Enron’s former CFO, Andrew Fastow, who was sentenced to 6 years in prison last week, 4 years less than was expected. Under a prior plea deal, he had agreed to serve 10 years.

4 Powerful Communication Strategies for Your Next Board Meeting