Prof. Larry Ribstein links here to a recent concurring opinion by Judge Kozinski that highlights some of the problems with criminalizing certain behavior of a company’s managers, when that behavior is more appropriately dealt with in the civil courts. The following introduction to the post gives you the background to the reversal by the U.S. Court of Appeals for the 9th Circuit of a conviction by a jury based in large part on accounting issues:
In U.S. v. Goyal, the government contended that the defendant, former CFO of Network Associates, had violated GAAP by causing the company to recognize revenue from certain sales sooner than it should have, and of lying to the company’s auditor. The jury convicted defendant of securities fraud, false SEC filings, and making materially false statements to NAI’s auditors.