The specter of the Enron bankruptcy has left two lasting legacies: litigation and corporate governance. Whether these issues have been a benefit or a liability continues to be debated.
"The pig may have moved through the python," said Joseph Grundfest, director of the Class Action Clearinghouse at the Stanford Law School and a former commissioner of the Securities and Exchange Commission.
The clearinghouse's report on litigation shows that the number of securities fraud class actions filed in 2005 declined to 176, down more than 17 percent from the previous year.
"Two factors are likely responsible for the decline. First, lawsuits arising from the dramatic boom and bust of U.S. equities in the late 1990s and early 2000s are now largely behind us. Second, improved governance in the wake of the Enron and WorldCom frauds may have reduced the actual incidence of fraud," said Grundfest.
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