SAN FRANCISCO MarketWatch -- The convictions of former Enron executives Ken Lay and Jeffrey Skilling Thursday were widely applauded across the U. A Houston jury found Lay, Enron's former chairman and chief executive, guilty on all six counts of fraud and conspiracy.

Former chief Skilling was found guilty on 19 counts of fraud and conspiracy, including one count of insider trading. He was acquitted on nine counts of insider trading. For some corporate leaders, however, an even stronger verdict from Enron's misdeeds came long ago in the form of stricter compliance rules -- which have added to the cost of doing business, especially for smaller companies.

Fleury, who agreed to sell his company to Red Hat Inc.

Management decisions like Fleury's trouble George Roche, chairman and president of T. Rowe Price Group Inc. While he praised the Enron verdict as showing strongly that "the system works," Roche said that new federal rules and regulations designed to thwart unscrupulous managers ultimately harm ethical executives as well. That tells you something.

Enron Is Proving Costly to Economy - latimes

Maybe the rules are too burdensome. Roche added that T. Rowe Price, while able to absorb the higher regulatory costs, must still deal with new layers of bureaucracy. I'm worried about small companies. Small companies add all the new jobs in America. For others, the benefits to investors from increased compliance and disclosure far outweigh any bottom-line costs. In reaching its verdict, the Enron jury focused on the responsibility Lay and Skilling had in their company's demise, dismissing the argument that the two defendants were unaware of the accounting fraud that was perpetrated to cover up debts.

The Enron case also could find corporate managers facing more probing questions from company attorneys about their decisions and dealings, according to Barbash. There's a need for lawyers to push back and hold the line. Jonathan Burton is a MarketWatch editor and columnist based in San Francisco.

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Enron Is Proving Costly to Economy - latimes

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