Mt. Vernon Register-News

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May 25, 2006

Lay, Skilling convicted in Enron collapse

HOUSTON (AP) — Former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling were convicted Thursday of conspiracy to commit securities and wire fraud in one of the biggest business scandals in U.S. history.

The verdict put the blame for the 2001 demise of the high-profile energy trader, once the nation’s seventh-largest company, squarely on its top two executives. It came in the sixth day of deliberations following a federal criminal trial that lasted nearly four months.

Lay was also convicted of bank fraud and making false statements to banks in a separate, non-jury trial before U.S. District Judge Sim Lake related to Lay’s personal banking.

The conviction was a major win for the government, serving almost as a bookend to an era that has seen prosecutors win convictions against executives from WorldCom Inc. to Adelphia Communications Corp. and homemaking maven Martha Stewart. The public outrage over the string of corporate scandals led Congress to pass the Sarbanes-Oxley act, designed to make company executives more accountable.

Enron’s demise alone took with it more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.

Enron founder Lay was convicted Thursday on all six counts against him in the corporate trial. Former Chief Executive Skilling was convicted on 19 of the 28 counts, including one count of insider trading, and acquitted on the remaining nine.

‘‘Obviously, I’m disappointed,’’ Skilling told reporters outside the courthouse. ‘‘But that’s the way the system works.’’

Skilling’s lawyer, Dan Petrocelli, said the verdict ‘‘doesn’t change our view of what happened at Enron ... or Jeffrey Skilling’s innocence.’’

Lake ordered Lay to stay in the courthouse until his passport was surrendered and until the conclusion of a 2 p.m. CDT bond hearing.

Lake told jurors, ‘‘you have reflected on this evidence for the last few days and reached a very thorough verdict, and I thank you.’’

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