The Fifth U.S. Circuit Court of appeals released two former Merrill Lynch & Co. bankers from jail. The men had been convicted on fraud charges in 2004 for helping failed Enron Corp. inflate its profits.

Both Daniel Bayly, Merrill's former investment-banking chief, and Robert Furst, the former Enron relationship manager for Merrill, were ordered released on bail while they continue appealing their convictions in connection with a Nigerian barge transaction. Merrill invested in the deal, allowing Enron to book $12 million in earnings. At trial, prosecutors said that because Enron guaranteed Merrill's profits, it had improperly booked the earnings and overstated its own profits.

Bayly was been sentenced to 30 months in prison, while Furst received a 37-month sentence.

While the Fifth Circuit didn't reverse either conviction, lawyers for other Merrill executives facing charges told several publications that the news has to be taken as a good sign.

In 2005, the U.S. Supreme Court reversed the conviction of Arthur Andersen LLP for obstructing justice by shredding documents related to its work for Enron. More recently, lawyers for convicted Enron executives Ken Lay and Jeffrey Skilling have said that they will appeal.

Previously on WebCPA:

Jury Finds Lay, Skilling Guilty (May 25, 2006)

Andersen Conviction Reversed (June 1, 2005)

Former Enron Accountant Acquitted, Five Others Convicted (Nov. 5, 2004)

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