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Jury Deliberating in Ken Lay - Jeff Skilling Case

The Enron jury is deliberating the fate of Ken Lay and Jeff Skilling. Here's a recap of the witnesses who testified.

Andrew Cohen at WaPo's Bench Conference has been following the closing arguments. Today he discusses deliberations. I agree with him the jury won't return a very quick verdict. They have four months of evidence to pour through.

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  • This has nothing to do with the substance, but that Bench Conference article is just sloppy:
    They get to decide when they deliberate, and how, and of course how this grand moral drama ultimalley will turn out.
    Jaded by television dramas, and distrustful of power, jurors often try to fiind the simplest path out of the case they are asked to resolve.
    Texs juries are famous for being quick and decisive.
    I'm not the best speller, but this is the Washington Post . . . shouldn't they have editors reading these things before they go up on the web site? You'd think the author would at least run spell check.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#2)
    by Dadler on Wed May 17, 2006 at 12:42:50 PM EST
    Snakes can slither away. Which is the guiding hope for these defendents. Snakes can feed on other snakes. Which is their second guiding hope -- with respect with witnesses with deals. This was a gigantic fraud. I don't envy the jury. And I can but hope justice is somehow gained. I remember the manufactured "crisis" in my state. The energy debts incurred, the businesses that went down, the elderly that went without electricity in the summer...the human toll. Perhaps no one will ultimately be held accountable. Beside some middle types who could NOT have acted alone. I sense some guilty verdicts, but we'll see. This is just one of those cases where the legal system doesn't seem best suited to get to the truth. The technical legal verdict, sure, that's its role. But not the truth. Depressing, in other words. A circus of trampolining corporate diversions and buck-passing boilerplate acrobatics. And I agree the verdict will take awhile. Or so logic would suggest. Maybe so long a verdict CAN'T be reached.

    While we're on the subject of spelling, let's hope the evidence doesn't get too wet when the jury pours through it.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#4)
    by Dadler on Wed May 17, 2006 at 12:54:10 PM EST
    Cymro, I tought it was puree. As in slice, dice, julienne.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#5)
    by Dadler on Wed May 17, 2006 at 12:55:46 PM EST
    slice, dice, julienee into mush, i meant to add.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#6)
    by Dadler on Wed May 17, 2006 at 12:56:11 PM EST
    julienne. ahem.

    I sense some guilty verdicts, but we'll see.
    I think you're right. I don't see how the defense argument that "the company was just fine until the WSJ and short sellers started killing the stock price" argument is going to fly. Convincing a jury that an enormous and fundamentally "healthy" company can go bankrupt in weeks based on speculation and newspaper articles strikes me as a tall order. But at the same time, I honestly think there are issues about what these guys at the top knew. Look how deluded Saddam Hussein was. His generals were telling him that the U.S. wouldn't attack right up until the bitter end. I wouldn't be surprised if these guys got some of the same treatment.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#8)
    by james on Wed May 17, 2006 at 05:47:57 PM EST
    I think you're right. I don't see how the defense argument that "the company was just fine until the WSJ and short sellers started killing the stock price" argument is going to fly. Convincing a jury that an enormous and fundamentally "healthy" company can go bankrupt in weeks based on speculation and newspaper articles strikes me as a tall order. But at the same time, I honestly think there are issues about what these guys at the top knew...I wouldn't be surprised if these guys got some of the same treatment.
    To begin with there is a fundamental difference between Lay and Skilling - the latter is a former McKinsey consultant who is a micromanager and very well versed in financial/accounting matters. Lay, however, has less of a financial accounting background *although* he still has enough of one to be culpable to some extent. A 'guilty' verdict would require the jury to believe not that Enron was bankrupt but that Lay and Skilling knew about it - and if so how much they knew. The defence would put the blame on Fastow who profited from the Special Purpose Vehicles he created to hide losses (off balance sheet liabilities). Unlike Hussein, Skilling and Lay had access to financial data that is examined by internal auditors. While the systems are complex, it's really just a computerized accounting system that records all transactions. That's raw data. The question is what happened with that raw data. Specifically how the financial reports were generated. Because there were internal auditors the low level fraud (employee) didn't occur. Fastow, however, got to decide the ultimate way to present the material and structured the reporting systems in a way that it would be very difficult for the different groups to recognize outright fraud. There would also be job security issues, of course. basically, though, Fastow relied on data from different accounting systems (they didn't have a centralized system which is lovely if you want to manipulate things) and then manipulated it. Concerns were raised by some executives. Ultimately, however, the blame lies with Skilling for sure and Lay to an extent. Lay is financially aware and was selling stock he should have disclosed (which he will be tried later for). Skilling, by all accounts, micromanaged the financial aspects of the company. He knew what was going on just by the transcripts of his testimony (he tried to imply that every failing business had a great upside in a few years with lots of information he would only have known being a micromanager). Of course, the ultimate criminals are those who ran the Enron audit ie Arthur Anderson. They knew what was up and were aware of the SPVs that Fastow created and the clearly erroneous accounting (you learn that some of the stuff they were doing were big no no s in basic accounting courses. I would expect Skilling to burn and Lay to be iffy, probably not guilty on several counts. Skilling faces more but came across horribly, just as Lay did in person to the jury. Sadly, I'm sure the jury will look at the 'human impact' of the episode when deciding the verdicts. That's something for sentencing that should be left out of deliberations (except for specific charged financial losses) which also has occurred in terrorism cases.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#9)
    by james on Wed May 17, 2006 at 05:50:51 PM EST
    This is what is going to get both convicted, read on (from the bbc)
    They [Lay and Skilling] suffered a blow last week when the judge ruled that jurors could find the men guilty of deliberately avoiding knowledge of massive fraud. Known as the "ostrich instruction", because it refers to a person sticking their head in the sand, the ruling means prosecutors can present a lower burden of proof to be successful.
    'Deliberately ignored' is not that difficult to decide on one way or another.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#10)
    by Che's Lounge on Wed May 17, 2006 at 07:35:50 PM EST
    Dadler, You've been to Julienne. It's just past Santa Ysabel on Hwy 78.

    Re: Jury Deliberating in Ken Lay - Jeff Skilling C (none / 0) (#11)
    by Che's Lounge on Wed May 17, 2006 at 07:47:34 PM EST
    Skilling and Lay were grossly negligent. It lead to financial ruin for hundreds of people. Why is it that personal or professional responsibility goes right out the window when defending their involvement? Where are the libertarians on this? It seems we can lock up a mother because her kids were chronically late for school, but these thieves can live high and mighty, then at best they lose control and lie about it, and they haven't spent one millisecond behind bars. I wonder where they are having dinner tonight? Certainly not in a jail cell. I've said it before and I'll say it again: Bah! This rant is now finished. Thanks for your time.