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Ebbers’ legacy: Accountability

Ebbers’ legacy: Accountability

by Rick Turoczy on March 16, 2005

Even before he was convicted Tuesday of directing an $11 billion fraud that triggered the largest bankruptcy in U.S. history, Ebbers’ legacy would include the Sarbanes-Oxley Act. The legislation heightened the focus on executive and director accountability when it came to financial management, oversight and disclosure.

In short, “I didn’t know” doesn’t cut it anymore.

“For corporate executives, the day when that excuse flies is long past. If you are a senior executive of a public company, then you need to know what’s going on. You need to be on top of what’s in the books,” said Morgan Burns, a partner in the corporate practice group of Faegre & Benson. “Directors of public companies have had a lot more duties thrust upon them. You have to be more diligent.”

Sarbanes-Oxley effects are felt by small as well as big businesses and private as well as public companies: “This is the new order,” said Rider Bennett attorney David Dean.

Ebbers’ legacy: Accountability

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