Bernie Ebbers was sentenced to 25 years in prison on the grounds that, as prosecutors posited, his crimes caused $2.2 billion in losses. But prosecutors' methodology for calculating that loss is questionable. As Tom Kirkendall points out, it contradicts the Supreme Court's recent decision in Dura Pharmaceuticals v. Broudo. The $2.2 billion figure even includes the decline in value of Ebbers's stock—requiring one to posit that Ebbers defrauded himself! The prosecution brief took the further unseemly step of arguing that the court could rely upon a class-action plaintiffs' expert allegation that the loss was $24 billion.

These issues probably doesn't make a difference in Ebbers's case, because the � 2.B1.1(a) of the 2002 Sentencing Guidelines' enhancement of sentencing level maxes out at $100 million. But the government has used similar tactics in its sentencing proposal for Daniel Bayly in a questionable transaction that was uncovered after Enron already went bankrupt. The Chamber of Commerce filed an amicus brief in the Bayly case.

Ellen Podger and Larry Ribstein also comment on the Ebbers sentence. (Ann Woolner, "How Ebbers Lucked Out With a 25-Year Sentence", Bloomberg, Jul. 15; John R. Emshwiller and Kara Scannell, "Business World Tells Government: Back Off", Wall Street Journal, Apr. 21 ($); Berman blog entry on Bayly).