RISMEDIA, Oct. 3, 2007-Former Cendant Corp. Chairman Walter Forbes has been sentenced to 12 years and seven months in prison for his conviction of conspiracy to commit securities fraud and two counts of making false statements. In addition, Forbes will be required to pay more than $3 billion in restitutions. This news comes after the Second U.S. Circuit Court of Appeals in New York upheld his conviction for leading a large accounting fraud at Cendant Corp, now named Avid Budget Group.
According to an article in the Wall Street Journal, the federal appeals court concluded that prosecutors’ use of the term “$14 billion fraud” in their opening statement was not misleading and prejudicial. They also said the district court accurately ruled that reference to the company’s decline in stock price and investor losses were permissible.
This case, says the Wall Street Journal, was among the first in the series of accounting scandals in recent years.
