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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: jlallen who wrote (738742)	5/3/2006 12:23:29 PM
From: pompsander	Read Replies (2) \| Respond to of 769670

jlallen, I remember we had a brief interchange recently on Ken Lay's Enron stock sales. I think this article displays that while Ken claimed he "bought and bought and bought" and didn't sell.....in fact, he was getting out of his Enron position to the fullest extent possible, and not just for margin calls. He had other liquid assets available if he didn't want to move the Enron shares. _____________ Lay contends banks 'forced' majority of his stock sales By Greg Farrell, USA TODAY Tue May 2, 7:09 AM ET Former Enron CEO Ken Lay sold tens of millions of dollars of Enron stock in 2001 to finance a lavish lifestyle that included a chartered boat for his wife's birthday and holidays on the French Riviera and in Mexico, a prosecutor said in court here Monday morning. In November 2001, when Enron was suffocating from a cash shortage and two weeks before it filed for bankruptcy court protection, Lay canceled Enron's Christmas party, then drew down the final $1 million that was available to him through a company credit line. Despite the revelations in his trial on charges of criminal conspiracy here, Lay insisted that the vast majority of his stock sales in 2001, which totaled $70 million, were "forced" by banks making margin calls on loans that were secured by Enron stock. Those margin calls were precipitated by Enron's sinking stock price throughout much of 2001. Under questioning from prosecutor John Hueston, Lay acknowledged that some stock sales, which did not have to be immediately disclosed to the investing public, were used to fund his lifestyle. But Lay maintained that after he regained the CEO title in August 2001, when his co-defendant and former CEO Jeff Skilling resigned, he sold Enron stock only because he had no other liquid assets. The government has accused Lay, 64, and Skilling, 52, of conspiring to hide the true state of Enron's financial condition from the investing public from 1999 to 2001. In particular, Lay is accused of making bullish statements about Enron to investors and employees in the fall of 2001. In September of that year, for example, Lay told employees that Enron's stock was undervalued and that he had recently bought stock. Prosecutors displayed documents showing that even while Lay was buying $4 million in Enron stock at that time, he was unloading more than $20 million worth of stock through a line-of-credit program at Enron that did not require immediate public disclosure of the sales. Lay sold his Enron stock to pay down personal debt even though he had access to about $19 million in cash and other stocks that could be sold quickly. In addition to his stocks, Lay also owned a $10 million luxury apartment in Houston and $20 million in other real estate holdings, mostly his three homes in Aspen, Colo. In his opening statement in January, Mike Ramsey, Lay's lead attorney, said his client never sold a share of Enron stock in 2001 that he wasn't forced to sell. Ramsey said the case would "rise or fall" on that fact. Challenging that assertion, Hueston presented evidence that Lay could have tapped other sources to pay debt. "I always thought Enron stock was undervalued," Lay said in an attempt to explain his sales. But Hueston mocked him, saying, "Day after day you were denoting your optimism by choosing to sell Enron stock."