May 25, 2006 -- Former Enron executives Ken Lay and Jeffrey Skilling have been found guilty of fraud and conspiracy.
Lay, 64, was convicted on all six counts against him, including conspiracy to commit securities and wire fraud. He faces a maximum of 45 years in prison. Lay also faces 120 years in prison in a separate case.
Lay posted a $5 million bond secured with family-owned properties at a hearing following the verdict. He was ordered to stay in the Southern District of Texas or Colorado.
"I firmly believe I'm innocent of the charges against me," Lay said following the hearing. "We believe that God in fact is in control and indeed he does work all things for good for those who love the lord."
Skilling, 52, was convicted on 19 counts of conspiracy and fraud. Combined with his conviction on one count of insider trading, he faces a maximum of 185 years in prison. Skilling was acquitted of nine other charges relating to insider trading.
"Obviously, I'm disappointed," Skilling told reporters outside the courthouse. "But that's the way the system works."
"I think we fought a good fight -- some things work, some things don't," he said.
Skilling's lawyer, Dan Petrocelli, said the verdict "doesn't change our view of what happened at Enron … or Jeffrey Skilling's innocence."
Jurors spent six days deliberating after more than three months of testimony from 54 witnesses in the fraud and conspiracy trial.
In a separate, nonjury bank fraud trial related to Lay's personal banking, U.S. District Judge Sim Lake found the Enron founder guilty of bank fraud and making false statements to banks. Lake had withheld his verdict in the Lay bank fraud case until the Lay-Skilling jury announced its verdict. Lay faces up to 120 years in prison in that case.
"You have reflected on this evidence for the last few days and reached a very thorough verdict, and I thank you," Lake told jurors.
Fall From Grace
Lay founded Enron in 1985 and served as its CEO for more than 15 years. Skilling joined the company in 1990, became its CEO in February 2001, and resigned abruptly in August 2001, citing family reasons.
Lay and Skilling were both credited with building Enron into a powerhouse hailed for its creative management, but their names have become associated with the wave of corporate scandals that followed Enron's demise.
But before its fall in December 2001, Enron had grown into a major energy trading company whose assets had at one point been estimated at $100 billion. It was considered a cutting-edge, aggressive entity that by the late 1990s had become a Wall Street darling and a model of management. It was ranked the seventh-largest company in the United States in the Fortune 500 index.
In February 2001, Fortune magazine's ranking of America's most admired companies listed Enron as No. 1 for "innovativeness" and No. 2 for "quality of management."
Since then, Enron has become a symbol of hubris, deceit and everything that is wrong with corporate America -- its name associated with the wave of corporate scandals that followed its demise.
"The verdict makes clear that high-level corporate executives who deceive the investing public for personal gain will be held fully accountable," Securities and Exchange Commission Chairman Christopher Cox said in a statement after the verdicts.
Skilling and Lay will will be sentenced Sept. 11, 2006.
Some information taken from wire service reports.