Lay and Skilling found guilty

Enron's Lay and Skilling guilty
Former Enron bosses Ken Lay and Jeffrey Skilling have both been found guilty on fraud, conspiracy and other charges.

The two presided over the spectacular collapse of the energy giant in 2001 and were also accused of lying to investors about its financial problems.

The two former chief executives faced 34 counts relating to Enron's collapse.

The energy trading firm went from being the US's seventh largest company to bankruptcy, amid allegations of accounting irregularities.

In October 2001, it had to announce huge losses as its shares dived.


ENRON TIMELINE
1985: Enron formed
Oct 2001: Enron reports $638m third quarter loss and $1.2bn fall in shareholder equity
Oct 2001: Securities and Exchange Commission begins inquiry into firm
Nov 2001: Enron shares sink to 10-year lows as buyout deal falls through and further losses are revealed at the firm
Dec 2001: Enron files for Chapter 11 bankruptcy
2002: Criminal investigation launched
2004: Skilling and Lay charged over Enron collapse Former finance chief Andrew Fastow pleads guilty to criminal charges and agrees a 10-year jail term
Jan 2006: Enron trial begins
May 2006: Enron trial ends with guilty verdicts for Skilling and Lay on 25 out of 34 charges

Two months later, it filed for bankruptcy as allegations began to emerge that it had used off-the-books offshore firms to hide losses.

The firm's auditor, Arthur Andersen, was forced out of business following the collapse of Enron, as it was seen as having colluded in the accounting practices.

In a separate case, Lay has also been found guilty by a District Court judge of four charges of bank fraud totalling $75m.

USA Inc in the dock

The Enron case is the culmination of a string of high-profile cases involving corporate misbehaviour.

Among them was the conviction of Worldcom chief executive Bernie Ebbers for fraud and conspiracy, and homecare queen Martha Stewart for insider trading.

Andrew Fastow, Enron's former chief finance officer, pleaded guilty to his part in the scandal in 2004 having agreed to testify against his former bosses.

He paid fines totalling $23m and received a sentence of 10 years in jail.

Blockbuster trial

The trial of Lay and Skilling in Houston follows four years of investigation by the Department of Justice's Enron Task Force. It lasted for 15 weeks, with 54 witness called by the two sides.

The verdict came on the jury's sixth day of deliberations.

In all, Skilling has been found guilty on 19 of the 28 counts he faced - with the "not guilty" verdicts coming on some of the charges of insider trading.

He could face as much as 185 years in jail.

Lay, however, has been found guilty of all six fraud and conspiracy charges that he faced. He could face as much as 45 years behind bars.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/5017298.stm