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Enron Convictions - Ken Lay and Jeffrey Skilling Convicted of Fraud and Conspiracy From Collapse of Energy Company - Sentenced Later

May 25th 2006

Enron Convictions - Ken Lay and Jeffrey Skilling Convicted of Fraud and Conspiracy From Collapse of Energy Company - Sentenced Later

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A jury found Enron executives Ken Lay and Jeffrey Skilling guilty of fraud and conspiracy in the 2001 demise of the energy company.  The jury of eight women and four men rendered their verdict in less than six days of deliberation after a four month trial.  Analysts expect both Lay and Skilling could face 20 to 30 years in prison. 

Lay, age 64, was convicted of six counts of conspiracy and fraud while the 52 year old Skilling was found guilty of 19 counts of conspiracy, fraud, insider trading and false statements. Matt Daily of Reuters reported that the jurors said they had to disregard the testimony from the two defendants that indicated they believed Enron was a healthy, vibrant company just months before its collapse.  Jurior Freddy Delgado said “To say that you didn't know what was going on in your own company is not the right thing."

 

Enron was once the ranked 7th in the Fortune 500 and took nearly $60 billion in market value when it collapsed.  Retirees lost an estimated $2.1 billion in pension plans and there were 5,200 jobs lost when the company crumbled.  Comment on this article at our Forum

Lay was convicted of all counts against him, while Skilling was convicted of 19 out of 28 counts against him.  Associated Press reporter Kristen Hays said 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.  She added that the public outrage over the string of corporate scandals led Congress to pass the Sarbanes-Oxley act, designed to make company executives more accountable.

 

According to CNN legal analyst Jeffrey Toobin, It was a slam-dunk in terms of the results but not a slam-dunk in terms of the process. This was not an easy case for the government. It was a tremendous victory for the Department of Justice.

Toobin said “These prosecutors did a fabulous job pulling this case together. It took a long time. It's been four years since Enron collapsed. That's a long time ... for an investigation and a case to come to trial. But they did it. And the result is a slam-dunk. But they had to defeat an enormously well-funded defense effort and a very complicated set of facts. I think it's just a tremendous tribute to the prosecutors.”

 
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Dan Wilson
Best Syndication

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