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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2648

Former Enron Corp. executives found guilty: Long prison terms expected

Daya Gamage – US National Correspondent for Asian Tribune

Washington, DC 26 May (Asiantribune.com): Former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling were convicted Thursday in U.S. District Court in Houston, Texas of conspiracy to commit securities and wire fraud, and lying about their company’s crumbling finances in one of the nation’s biggest business scandals in U.S. history.

Enron was once ranked as the seventh-largest company in the United States as a high-profile energy trader but filed for bankruptcy in December 2001.

Kenneth Lay, 64, was convicted of all six counts of conspiracy and fraud and faces a maximum of 45 years in prison, and the other Jeffrey Skilling, 52, was found guilty of 19 counts of conspiracy, fraud, insider trading and making false statements which, combined, carry a maximum sentence of 185 years.

The conviction was a major victory for the government. The government prosecutors on earlier occasions won convictions against executives from WorldCom Inc., Adelphia Communications Corp. and homemaker Martha Stewart.

“The administration has been pretty clear there’s no tolerance for cooperate corruption, and the Justice Department has been going aggressively after those who are involved in cooperate corruption,” the White House spokesman Tony Snow told the press in Washington reacting to the Houston judgment.

“Justice has been served today. The jury’s verdicts help to close a notorious chapter in the history of America’s publicly traded companies,” said US Congressman Michael Oxley in a statement who co-authored the Sarbanes-Oxley cooperate reforms.

The total collapse of Enron, which sent shockwaves in U.S. markets and eliminated thousands of jobs, their pension benefits and cost billions of dollars to shareholders, triggered the 2002 reforms now popularly known as Sarbanes-Oxley reforms. The reforms toughened financial and auditing requirements for publicly-owned companies.

Congressman Oxley further noted in his statement that “Sarbanes-Oxley, as well as today’s verdict, should remind us all of companies’ obligations to shareholders, employees, and retirees.”

Kenneth Lay, who once struggled to get out of his poverty-stricken family, climbed to the upper ranks of America’s business world while building Enron Corp. into one of the world’s most powerful energy companies. He was born the son of a poor Baptist preacher, but excelled in school earning both a bachelor’s and master’s degrees in economics from the University of Missouri.

The United States administration in recent years has been tough on cooperate scandals, and the Congress, both the House and the Senate constantly scrutinize cooperate America to safeguard investors, employees and retirees.

- Asian Tribune -

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