Back to Index

US: The Enron case. Corporation law

David Westbrook enlightens us further on the Enron affair, but he does not answer my question as to why it was incorporated in Oregon:

"Most states have some securities law (generally referred to as "Blue Sky" laws), but securities regulation is dominated by the federal government and a federal legal/regulatory structure that was born in the wake of the Great Depression. One of the continuing challenges for this regulatory regime is to respond appropriately to new developments in the financial markets, often driven by technology and legal ingenuity. Derivatives and the retail sale of securities over the internet are prominent examples of significant recent developments, and debate continues over what governmental responses are appropriate. Harvey Pitt, incidentally, is one of the editors of a book touching on just such matters, John Olson, Harvey Pitt, eds., Securities in the Electronic Age: A Practical Guide to the Law and Regulation (in another life, I co-authored a chapter).

So, to return to the "corporate" questions with which this thread began: Enron thus raises questions about whether the federal securities laws, particularly regarding disclosure, and more particularly, regarding the accounting conventions used to make such disclosures, need to be amended. Enron also raises questions of amending laws regarding political contributions and retirement savings, and no doubt other matters, but securities law is the place to start -- hence the attention devoted to Pitt and the SEC".

Ronald Hilton - 2/6/02