Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (290512)	7/8/2004 12:02:04 PM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 436258

Former Enron CEO Lay Surrenders in Houston By Carrie Johnson Washington Post Staff Writer Thursday, July 8, 2004; 11:04 AM Former Enron Corp. chief executive Kenneth L. Lay was charged with 11 counts of securities fraud, wire fraud, and false and misleading statements in a 65 page indictment unsealed this morning hours after he surrendered to federal authorities. Prosecutors accused Lay of taking over the helm of a massive conspiracy to hide Enron's rapidly deteriorating finances after August, 2001. He served as the "principal spokesman" to investors, employees, and credit rating agencies--and lied to all of them about the health of Enron's balance sheet, the indictment said. For instance, in September 2001, Lay told employees in an Internet forum that the stock was an "incredible bargain." But prosecutors say that in the months prior Lay had bought $4 million in Enron shares while selling $24 million. Lay reaped profits of $217 million through sales of Enron stock between 1998 and 2001, the indictment said. Over that period, he also collected $19 million in salary and bonuses. The government is seeking to seize Lay's 33rd floor penthouse apartment in the Huntingdon, a luxury complex near downtown Houston. The founder of the collapsed Texas-based energy company--once a major political force in Republican circles--surrendered to federal authorities this morning and was led away in handcuffs. Just three or four years ago, Enron appeared to be one of the most successful companies in America while Lay was a major figure in Republican political circles. Lay's lawyer, Michael Ramsey, said outside the courthouse today that Lay was criminally blameless. He was misled by finance chief Andrew S. Fastow and other underlings, Ramsey said. "Obviously, Andy [Fastow] and his group were not telling the boss that they were stealing from Enron. That's as obvious as can be . . . It was done by stealth and deceit and of course, in a company as big as Enron, you have to trust someone and obviously trust was placed in the wrong place." "Enron," said Ramsey, was Lay's "creation. He nursed it like a child. And the death of Enron was like the death of a child. He lost a fortune. His family lost a fortune," the lawyer said. "There may be people who for reward are saying something different now to help their own plight or assist their family," Ramsey said, a possible reference to Fastow's guilty plea after prosecutors charged his wife with filing false tax returns. In recent months, the grand jury has heard evidence from a series of former employees who said they alerted Lay to mounting financial problems in the months before the company disclosed phony earnings and billions in hidden debt. Lay was replaced as chief executive for six months ending in August 2001 by Jeffrey K. Skilling. Skilling was indicted on 35 fraud and insider-trading charges in February. The government says Skilling presided over a wide-ranging conspiracy that employed accounting maneuvers, false statements and other methods to prop up Enron's stock price in the years before it collapsed. Ramsey also suggested he would ask a judge to try Lay first, apart from Skilling and former Enron chief accounting officer Richard A. Causey. "We are ready for trial, but for the fact it's going to be hard to get a jury," Ramsey said, noting that polls show that lots of people in Houston "have an opinion" about the case. Lay was accompanied to the federal courthouse by his pastor, Steve Wende, of Houston's First United Methodist Church. Wende said that Lay and his wife "have been concerned about three things throughout this ordeal: God's blessing for all those hurt by the Enron debacle; for the truth to come out; and for God to guide the Lays." Legal experts said the trial could be among the most complex business schemes ever to be presented to a jury. Unlike the case of Fastow, who allegedly pocketed more than $60 million in company money without the board's knowledge, many of the accounting and legal issues reviewed by Skilling and Lay were vetted by outside experts. That could make it more difficult for prosecutors to convince a jury that the executives acted with intent to defraud. So far the Justice Department's Enron Task Force has charged 30 people connected to the company with conspiracy and other crimes. Eleven individuals have pleaded guilty or been found guilty after trial. Among prosecutors' key cooperating witnesses on the Enron case are Fastow, former treasurer Ben F. Glisan Jr. and former corporate secretary Paula H. Rieker. All three pleaded guilty. During Enron's heyday, when the firm reported revenue that ranked it seventh on the Fortune 500 list of publicly traded companies, Lay traveled the world to meet with power brokers and charity leaders. And he cultivated close ties to the Bush administration. President Bush nicknamed him "Kenny Boy." More than anyone else, Lay was responsible for creating a vast energy company with operations that spanned the globe. Now that empire is a shell of its former self. The turnaround experts at Enron's helm are negotiating to sell its biggest assets and to return to creditors about 20 cents on the dollar in cash and stock in an international enterprise. A federal judge in New York is considering a plan that would allow the company to emerge from bankruptcy protection. Special Correspondent Steven Long contributed to this report from Houston. © 2004 The Washington Post Company