NEW YORK – The sight of Bernard Ebbers (search) behind bars is certainly causing business executives to change their stripes.
"I don't think it's overstating the significance of Ebbers' 25-year prison term when talking about whether executives are more likely to toe the line on the law," said Seth Rodner, a former federal prosecutor.
"Prison time is certainly part of the business calculus today," he added.
That sentiment was echoed by Jacob Zamansky, who said it send a message to Wall Street that "if you do the crime, you will do the time."
Zamansky, who represent small investors swindled by brokers, said the sentence was "tough but fair."
Ebbers, 63, the former WorldCom (search) CEO convicted of masterminding the $11 billion accounting scandal at the former telecom giant, got the stiffest sentence ever handed down to a white-collar criminal.
The 21-plus years minimum time Ebbers will have to spend in prison — reflecting time off for good behavior — basically amounts to a life sentence.
"In the government's view, the only way to achieve any means of deterrence is to put corporate executives behind bars, said Rodner, who now heads the white-collar crime and investigations unit at Fowler White Boggs Banker, a Tampa law firm.
Ten years ago, when Rigas, Ebbers and others were helping grow their small companies, white-collar crimes were typically prosecuted by large corporate fines.
But then Enron's Ken Lay (search) came along. When Enron crashed and burned in the fourth quarter of 2001, prosecutors and Congress underwent am ideological sea change.
Now, they are out for blood, and Ebbers and Rigas were at the wrong place at the wrong time.
David Berg, who wrote the book "The Trial Lawyer: What It Takes To Win," called the Enron scandal "the watershed event" in white-collar crime.
"I think prison terms are a definite deterrent but that the Ebbers sentence was too tough by a factor of two," he added.
He said the same crimes a decade earlier would have found the company paying a hefty fine.