Two former Enron execs convicted
May 26, 2006
HOUSTON (AP) - Former Enron Corp chiefs Kenneth Lay and Jeffrey Skilling were convicted yesterday of conspiracy and securities and wire fraud in one of the biggest business scandals in United States history.
The verdict put the blame for the 2001 demise of the high-profile energy trader, once the nation's seventh-largest company, squarely on its top two executives. It came in the sixth day of deliberations following a federal criminal trial that lasted nearly four months.
Lay was also convicted of bank fraud and making false statements to banks in a separate, non-jury trial before US District Judge Sim Lake related to Lay's personal finances.
The conspiracy conviction was a major win for the government, serving almost as a bookend to an era that has seen prosecutors win convictions against executives from WorldCom Inc to Adelphia Communications Corp and homemaking maven Martha Stewart. The public outrage over the string of corporate scandals led Congress to pass the Sarbanes-Oxley Act, designed to make company executives more accountable.
Enron's collapse alone took with it more than $60 billion (euro47 billion) in market value, almost $2.1 billion (euro1.65 billion) in pension plans and 5,600 jobs.
"The jury's verdicts help to close a notorious chapter in the history of America's publicly traded companies," said Rep Michael Oxley of Ohio, co-author of the Sarbanes-Oxley legislation. "Appeals aside, the end of the trial will mark the end of a dark era."
Enron founder Lay was convicted on all six counts against him in the corporate trial. Former chief executive Skilling was convicted on 19 of the 28 counts, including one count of insider trading, and acquitted on the remaining nine.
Lake set sentencing for September 11. Lay's charges carry a maximum penalty in prison of 45 years for the corporate trial and 120 years in the personal banking trial. Skilling's charges carry a maximum penalty of 185 years in prison.
The sentencing will come five years almost to the day after Skilling sold 500,000 shares of Enron stock for $15.5 million (euro12.15 million), for which he was convicted of insider trading.
As Lake read the verdict from the bench, Lay tossed his head at hearing the first "guilty" on the conspiracy count. He clutched his wife's hand as he heard that word over and over again....
Author: AP
Source: Jamaica Observer
