A string of setbacks for federal prosecutors in corporate crime cases continued Dec. 10, 2010, when the 9th Circuit overturned the securities fraud conviction of Prabhat Goyal, former CFO of computer security company McAfee Inc. (formerly Network Associates). In a stinging rebuke to prosecutors, Chief Judge Alex Kozinski asserted that no reasonable juror could have found Goyal guilty beyond a reasonable doubt of any of the charges against him.
The government alleged that Goyal concealed improper accounting practices from the company's outside auditors and filed reports with the Securities and Exchange Commission (SEC) between 1998 and 2000 that misstated revenues based on the accounting irregularities. A jury convicted him on 15 counts. But the appeals court said prosecutors failed to prove he had committed any crime.
Kozinski underscored a key reason why former prosecutors say it is critical not to bring criminal charges unless the evidence warrants it: the impact on the defendant.
Rush to Judgment
Former prosecutors say there are several possible reasons why the government has been embarrassed by some recent white-collar crime cases (see "Stretching the Bounds").