June 18 (Bloomberg) -- Prosecutors might not be able to retry former Enron Corp. official F. Scott Yeager on charges stemming from the accounting fraud that caused the energy- trading company’s 2001 collapse, the U.S. Supreme Court ruled.

The justices, voting 6-3, said the Constitution’s ban on double jeopardy may bar a second trial of Yeager on charges, including insider trading, that left a jury deadlocked in 2005. The same jury acquitted Yeager, a onetime business strategist for Enron’s broadband unit, on other counts.

“A jury’s verdict of acquittal represents the community’s collective judgment regarding all the evidence and arguments presented to it,” Justice John Paul Stevens wrote for the court. To the extent the jury concluded that Yeager didn’t possess inside information, the verdict “protects him from prosecution for any charge for which that is an essential element.”

The high court said prosecutors can ask a federal appeals court to revisit whether the jury necessarily decided the inside-information question.

“It’s a huge victory,” said Ryan Malone, one of Yeager’s lawyers at Ropes & Gray LLP in Washington. He said Yeager “is extremely happy with the result.”

Securities Fraud

Yeager at one point faced 125 counts. The jury acquitted him of securities fraud and other charges while failing to reach a verdict on insider trading and money laundering allegations. He was then re-indicted on 13 insider trading and money laundering counts.

The high court’s ruling may affect the cases of two other Enron executives, Joseph Hirko and Rex Shelby, who were tried alongside Yeager and have made similar arguments.

All three men were accused of overstating the struggling unit’s technical and financial performance and then profiting from that misrepresentation by selling their Enron shares. Investors were told that Enron Broadband Services, which never posted a profit, added billions of dollars to the parent company’s market value.

Today’s decision reverses a ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals, which said Yeager, Hirko and Shelby could be retried on the counts that deadlocked the jury.

Plea Agreement

Hirko, the former chief executive officer of Enron Broadband Services, has reached a plea agreement that calls for him to serve 12 to 16 months in prison. He is scheduled to be sentenced in September, and his lawyer, Per Ramfjord, said he will use today’s Supreme Court ruling to argue for a sentence closer to 12 months.

Separately, the Securities and Exchange Commission announced today that Hirko will pay $1 million to settle the regulator’s civil claims.

Shelby, the unit’s former technology chief, filed a brief backing Yeager in the Supreme Court case.

Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented. Scalia said that the majority’s reasoning was out of step with the original meaning of the double jeopardy clause and previous Supreme Court cases.

Under earlier high court rulings, “retrial after a jury has failed to reach a verdict is not a new trial but part of the same proceeding,” Scalia wrote.

The case is Yeager v. United States, 08-67.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

Last Updated: June 18, 2009 15:50 EDT