Imagine if business actually operated under the approach Enron's former CEO is defending in court.
Listening to defendant Jeff Skilling Wednesday in Houston, as he headed into the home stretch of his stint on the witness stand, it was scary to think about how the world of business might operate under the approach he is defending in court.
By Skilling's rules, it would be perfectly fine to tell investors and analysts things that weren't true if the truth could perhaps be discerned from the fine print in your annual report. That was the message from a particularly stunning stretch of his cross-examination, on the hotly contested subject of whether Enron was - or wasn't - a trading company.
For those of you arriving to the scene late, this issue was critically important to analysts and investors, because Wall Street is wary of the volatile profits produced from risky speculative trading, and gives trading companies (such as Goldman Sachs (Research)) a considerably lower stock multiple than companies with more predictable earnings.
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