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The Enron Verdict : Ken Lay and Jeff Skilling Convicted

By TChris, Section Crime in the News
Posted on Thu May 25, 2006 at 09:19:53 AM EST
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by TChris

Breaking news:

Enron founder Kenneth Lay was convicted today of all six counts against him, including conspiracy to commit securities and wire fraud.

Former Enron Chief Executive Jeffrey Skilling was convicted of conspiracy to commit securities and wire fraud.

Update: TL: From the AP:

Lay was also convicted of bank fraud and making false statements to banks in a separate trial related to his personal banking.

Lay was convicted on all six counts against him in the trial with Skilling. Skilling was convicted on 19 of the 28 counts against and acquitted on the remaining nine.

More news of verdict here. TalkLeft background on the case is collected here.

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    The Enron Verdict : Ken Lay and Jeff Skilling Convicted | 33 comments (33 topical)
    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#1)
    by Talkleft Visitor on Thu May 25, 2006 at 09:27:57 AM EST
    totally great news. Good for the workers of Enron and good for californians who had to eat a lot of money to support these two convicted criminals. Yahoo!

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#2)
    by Slado on Thu May 25, 2006 at 09:31:01 AM EST
    Agreed. Took forever but so does everything these days. Guilty and going to jail. yeah.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#3)
    by aw on Thu May 25, 2006 at 09:41:14 AM EST
    Yay!

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#4)
    by legion on Thu May 25, 2006 at 09:47:50 AM EST
    Lay - done. Skilling - done. With Rove's indictment in the wings, the Bush Enabler Trifecta is in play! With possible Superfecta action from Delay and Hastert, too!

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#5)
    by Talkleft Visitor on Thu May 25, 2006 at 09:47:51 AM EST
    People are saying they can stay out of jail while appeals are happening. Is that true? Does anybody think Bush would risk the backlash from pardoning them?

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#6)
    by Talkleft Visitor on Thu May 25, 2006 at 09:48:58 AM EST
    Simmer down, there will be no pardon.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#7)
    by desertswine on Thu May 25, 2006 at 10:13:35 AM EST
    Berkowitz also reminded the jurors that justice for Lay and Skilling, who invested at least $38 million combined in their united defense, should not be bought.
    Jeebus, 38 million buckaroonies.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#8)
    by james on Thu May 25, 2006 at 10:18:58 AM EST
    There is such a thing as bond during the appeal process - Frank Quattrone (Credit Suisse First Boston) who was an infamous internet investment banker was out for two appeals. He won both and is on his 3rd trial (well, not just yet). I believe the judge rules as to whether the appeal has real merit when making such a determination (at least this is the case in NC and WA where i used to live). I'm not sure how this is a 'victory' for Enron employees and the citizens of California. There is no financial compensation. The California 'energy crisis' was only partly the result of manipulative/illegal energy trading. There were also very real supply issues. (Yes, Enron did very much 'manipulate' the energy market in Cali but that was basically all enron was at the time, ie, energy traders). As for the employees - the only reason they would feel good about this is if they were ignorant enough to invest *anything* in Enron stock. A very simple financial rule of thumb is not to invest in the company you work for (unless of course it's stock options that are a benefit then you dump them when you exercise the options). I feel badly for Enron employees and don't have any sympathy for either Lay or Skilling. I do, however, have a REAL problem with the current sentencing guidelines they are facing (20-30 years).

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#9)
    by Talkleft Visitor on Thu May 25, 2006 at 10:24:38 AM EST
    Posted by croc_choda May 25, 2006 10:48 AM Simmer down, there will be no pardon
    Thanks for your condescending response.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#10)
    by James DiBenedetto on Thu May 25, 2006 at 10:39:58 AM EST
    James - what about the possible rison sentence do you have a problem with? I understand what site I'm commenting at, but I'd think that if anybody merited many, many years in Federal prison, it would be Lay and Skilling. They did tremendous harm to thousands of people, bankrupting some, endangering the retirements of many more. I can't agree with your implication that the employees whose savings were wiped out by Lay, Skilling and company, basically brought it on themselves (that's how I'm reading your "ignorant enough" comment; I apologize if I'm misinterperting what you meant). I'll agree that nobody should put their whole savings into their own company's stock, but that doesn't make it OK for the folks in charge to systematically destroy those savings in a fradulent manner. These guys are the kind of criminals who should get the harshest possible sentence; they are infinitely more harmful to society than the violent criminals we see on the local news every night.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#11)
    by Slado on Thu May 25, 2006 at 11:08:33 AM EST
    No matter how much I dislike Lay and Skilling I'm not going to compare them to murderers and rapists. What violent crimes are not worse then bank fraud? The people of Enron are not dead or severly injured from their dealings with these perps. Let's kepp a little perspective. Also (4) is the count of posts it took to drag Presdident Bush into this thread. Also a splash of Rove and Hastert was thrown in even though they haven't been indicted let alone convicted of anything. I thought this was a legal defense site?

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#12)
    by Che's Lounge on Thu May 25, 2006 at 11:09:37 AM EST
    Then what are they doing walking around our streets? They will die of old age awaiting appeal. What are they having for dinner tonight? As a CA resident I am about 200 million miles away from satisfied. Deterrent? Hardly. Though I respect the efforts of the prosecution.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#13)
    by legion on Thu May 25, 2006 at 11:22:15 AM EST
    Slado- Aside from the general economic chaos, their actions directly destroyed the retirement of many, many ex-Enron employees - their ability to secure food, housing, and other necessities during the time in their lives when they're not expected (or able) to work full-time. Not to mention the impact on millions of people across the country attempting to afford heating during the winter of the CA energy crisis. I won't equate them with cold-blooded murderers, but hell yes there are violent crimes not as devastating as what these greedy asshats did. And yes, this is a legal defense site - not a court of law. Speculation and hearsay (when admitted as such) are par for the course.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#14)
    by Kitt on Thu May 25, 2006 at 11:22:18 AM EST
    And they were such good men, too.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#15)
    by Talkleft Visitor on Thu May 25, 2006 at 11:24:49 AM EST
    What a study in contrasts. Berkowitz delivers justice in a complex case. Nifong sacrifices justice to win re-election -- the poster child for prosecutorial misconduct. For an egomaniac like Skilling, having his reputation catch up with crimes is worth more than 10 years of jail time. Thankfully $38 million couldn't stop the truth...

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#16)
    by Talkleft Visitor on Thu May 25, 2006 at 11:27:16 AM EST
    slado:
    I thought this was a legal defense site?
    I have seen you make this kind of remark before. It appears to be based on the fallacy that being in favor of defendant's rights equates to being in favor of crime.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#17)
    by James DiBenedetto on Thu May 25, 2006 at 11:40:07 AM EST
    Slado, I'll take what legion said, and also note that there were, if memory serves, at least a few suicides among bankrupted Enron employees. I won't go so far as to say that Lay and Skilling should be held legally responsible for the suicides of folks they defrauded, but if we're talking about the harm they did, I think they have to be considered. I think comparing Lay and Skilling and other big time corporate criminals to rapists and murders is completely fair. While defrauding an individual or even bankrupting them isn't on the same level as murdering or raping them, defrauding and bankrupting, say, 10,000 people is arguably, in terms of the effect on society, much worse than murdering or raping one individual - and should be punished accordingly.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#18)
    by Talkleft Visitor on Thu May 25, 2006 at 12:12:07 PM EST
    I wouldn't compare the Enron boys to rapists or murderers, but how about armed robbers? "I didn't hurt nobody, Your Honor; I just took their money." And to quote old Woody Guthrie, "Some rob you with a six gun. Some use a fountain pen."

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#19)
    by Talkleft Visitor on Thu May 25, 2006 at 12:38:03 PM EST
    IIRC, Tyco's Dennis Kozlowski went immediately to jail to begin his term while the appeals process went on. Is that simply the judge's decision? I'm okay with it: he was found guilty, after all. And I would think it appropriate if the same treatment was used for Lay and Skilling.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#20)
    by cpinva on Thu May 25, 2006 at 12:38:49 PM EST
    And they were such good men, too.
    they kept their yards very neat, just like that nice mr. dahmer down the street. ken lay should be sentenced to life, but not for the reason you think. as the ceo of a major corporation, he had a fiduciary and moral responsibility to know what was going on with that company. to claim, as he did, that he had no clue, is felony mismanagement. further, as part of his punishment, he should be placed in a room, with closed/locked doors, occupied by ceo's who do know what's going on with their companys, and beaten to a bloody pulp, for embarassing them all with his callous indifference. (wait, damn, i just described our president!) finally, both lay and skilling should have every bit of real and personal property they own confiscated, than sold at auction, to partly compensate those they defrauded. toss them and their families out on the street. if they're so smart, they should bounce right back in no time. bear in mind, it wasn't just current and former enron employees they defrauded, it was other pension funds, and every creditor the company had. lastly, everyone who worked in the accounting dept. should be barred, forever, from working in any financial area, in any capacity. their complicity helped it all happen.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#21)
    by Talkleft Visitor on Thu May 25, 2006 at 01:10:46 PM EST
    Its funny how the Gov. will take anyones money except the rich. God we wouldnt want there family to suffer.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#22)
    by Richard Aubrey on Thu May 25, 2006 at 01:49:34 PM EST
    It is unfortunate that, with the first bogus hike in stock price, every Enron shareholder became unwittingly complicit in the scam. Or, at least, had a vested interest, even if they didn't know it, in the scam continuing. Otherwise, they lose their money. Some seemed upset they didn't get the word in time to sell to some other poor schmuck who hadn't gotten the word, until their stock was pretty much a pile of cellulose and nobody wanted it. Kind of an interesting concept to figure out too late: your financial future depends on the scam continuing, at least until you can unload. Even if you had nothing to do with it, that's the position you'd be in. And if you lost your bundle, not knowing anything until too late, you'd still be thinking about how you should have unloaded earlier, either on the strength of a rumor, or on general purposes. And how that would have meant somebody else got screwed. No fun for anybody here. Those who did sell, wittingly or not, in time, might have survivors' guilt. Or not. There is a bit of theater the company pulled off. They set up a fake trading floor with a hundred people sitting at consoles barking orders, probably to each other, trading exactly nothing. Potemkin. The objective was to impress some visitors who were just walking through and might be impressed enough to invest. Can we believe that everybody involved kept his boca shut? I don't. It's against human nature. I'd like to get the business editors of the local papers in a room and spike their latte with sodium pentothal. What did they know and when did they know it?

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#23)
    by Dadler on Thu May 25, 2006 at 02:04:18 PM EST
    "Lay" is a bad last name to be toting around in prison. While orange makes Skilling look out of season and jaundiced. I think he's a Spring.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#24)
    by Dadler on Thu May 25, 2006 at 02:07:26 PM EST
    R.A., Business editors??? If you're gonna open a sodium pentathol gallery, wouldn't Lay and Skilling get the first shots?

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#25)
    by Sailor on Thu May 25, 2006 at 02:53:24 PM EST
    What violent crimes are not worse then bank fraud?
    If you kill a QuikieMart clerk for $50 bucks you ended his life and devastated his family. the enron crooks ruined the lives of tens of thousands of people. Hang 'em, hang 'em high.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#26)
    by jondee on Thu May 25, 2006 at 03:00:15 PM EST
    "Ruined the lives of tens of thousands of people" By enabling a certain putz when he was Governor of Texas. Then there was the money they helped steal.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#27)
    by ding7777 on Thu May 25, 2006 at 03:07:43 PM EST
    To James
    A very simple financial rule of thumb is not to invest in the company you work for
    that would be hard to do if Enron's matching contibution to an employee's 401(k) was in the form of Enron stock...

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#28)
    by Richard Aubrey on Thu May 25, 2006 at 04:36:03 PM EST
    Dad. No. We already know enough about what Lay and Skilling knew, for our purposes. We know nothing about what I suspect the biz journos knew. Or, to be fair, strongly suspected. I don't think I'd go with anything less than "strongly suspected", my well-known charitable streak notwithstanding.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#29)
    by Dadler on Thu May 25, 2006 at 06:37:30 PM EST
    R.A., We have a VERDICT, but we don't know the full extent of the truth. And biz writers, unless they have Enron stock, would have no reason to ignore that big a story if they were really on to it. I remember plenty of people, myself included, saying the dot-com craziness was just that, and that the energy market was being manipulated to hell by the likes of Enron. I was told, hey, that's the free market.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#30)
    by Talkleft Visitor on Thu May 25, 2006 at 06:47:31 PM EST
    I have a certain amount of sympathy for Ken Lay. He started the company and made it a major force in corporate America doing everything legitimately. The overwhelming majority of the fraud happened on Skilling's watch. When Skilling abruptly stepped down, Lay stepped in to oversee the last few months. Even if someone came to him and said, "I don't know if you got the memo, but these last five years of phenomenal growth have all been premised on fraudulant accounting" I think the first impulse most executives would have at that point would be calling their outside auditors - arthur anderson. I imagine AA was in full as* covering mode by that point.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#31)
    by Richard Aubrey on Thu May 25, 2006 at 07:53:41 PM EST
    Dad. The full extent may interest you, but it's probably details. Biz journos ought to have been sniffing around in the normal course of affairs. And somebody, somewhere, either in Enron or A.A.might have said something. Must have said something worth following up. I want to know what happened between hearing something and....nothing in ink. Not worth a breath-holding exercise. I have relations in the Houston area. Maybe I'll ask about rumors. Whatever A.A. did or didn't do, they would forever be branded as losers. Any publicly-traded firm whose accountants were A.A. would instantly lose share price. How is an investor to know...anything about the firm? Those guys couldn't get a job with H&R Block.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#32)
    by Talkleft Visitor on Sat May 27, 2006 at 04:05:27 AM EST
    I agree that justice may have been served, but these two men had a huge responsibility on their shoulders. I think in a way its unfair to heap this on them so heavily as if we think about it, Enron was successful once and this led to the expectancy of success from the media, the political arena and the employees that worked there. I believe that they started off as well intentioned. I don't think these two men should go to prison for the rest of their lives for trying to live up to the "American Dream". Deep down, we all know they are not really guilty, but acted in a manner that made them do all to control an out of control situation with a company where there were too many decision makers in the ranks and too many bright ideas that needed to be turned into profit for fear of job loss. It could have happened to any of us. Success and appearing to do well when we are not are part of many peoples lives today. Enron was no exception. I guess the employees got what they wanted and all the people that were lied to and stolen from, but what of Jeff Skilling and Ken Lay? They will be in a prison cell for the rest of their lives. A bit harsh for people who created years of employment for a large number of american people and boosted US economy for a number of years.

    Re: The Enron Verdict : Ken Lay and Jeff Skilling (none / 0) (#33)
    by Andreas on Sat May 27, 2006 at 04:57:35 AM EST
    Charmaine wrote: "It could have happened to any of us." No. Speak for yourself only and not for me. Thanks.

    The Enron Verdict : Ken Lay and Jeff Skilling Convicted | 33 comments (33 topical)