| Former Enron CEO Jeff Skilling reacts after the verdict was announced in Houston, Texas, on Thursday. (Reuters)
Houston, May 25 (Reuters): Former Enron Corp. chief executives Ken Lay and Jeffrey Skilling were found guilty today of lying about their company’s troubled finances in one of the biggest US business scandals and could face years in prison.
The jury verdict in a trial that began on January 30 capped a four-year-long government effort to get those responsible for a corporate collapse into bankruptcy that cost investors billions of dollars, wiped out thousands of jobs and sent shockwaves through Wall Street and Washington.
Lay, 64, and Skilling, 52, who were once lauded as two of the world’s top business leaders but later became poster boys for corporate deception, looked shaken when US judge Sim Lake read the decision to a packed courtroom. Skilling looked down as the verdict was read. Lay sighed heavily and shook his head, as his wife Linda grabbed his arm.
Afterwards, Lay’s family members swarmed around him, weeping. He was not crying as he tried to console them, saying: “God’s got another plan right now.” Lay was convicted of all six counts of conspiracy and fraud and faces a maximum of 45 years in prison.
Skilling was found guilty of 19 counts of conspiracy, fraud, insider trading and making false statements which, combined, carry a maximum sentence of 185 years. He was not convicted of nine criminal counts.
In a separate trial for Lay, Judge Lake found him guilty of all four bank fraud charges for illegally using money from $75 million in personal loans to buy stock.
Each of those four charges carries a maximum of 30 years, but experts say he is unlikely to get a sentence of more than six months for each because he paid off the loans and the lenders suffered no economic damage. Skilling will remain free on a $5 million bond, while Lake said Lay must post a $5 million bond and give up his passport to stay out of jail until sentencing, set for September 11.
Skilling attorney Daniel Petrocelli promised to fight the convictions.
“We will have a full and vigorous appeal,” he said.
“This is obviously a very difficult time for Skilling and his family. There is a lot of thinking to do about the next steps that we take but as I told him, we have just begun the fight,” Petrocelli said.
Skilling was almost philosophical about the verdict. “I think we fought a good fight but some things work and some things don’t,” he said. “Obviously I am disappointed but that is the way the system works.” Lay’s attorney Mike Ramsey also promised an appeal.
Enron, which at its height was the nation’s seventh-largest company, collapsed in December 2001 into the biggest US bankruptcy at the time amid disclosures it used off-the-books deals to hide billions of dollars in debt and inflate profits.