Kenneth Lay - Indictment and Trial

Indictment and Trial

On July 7, 2004, Lay was indicted by a grand jury in Houston, Texas, for his role in Enron's collapse. Lay was charged, in a 65-page indictment, with 11 counts of securities fraud, wire fraud, and making false and misleading statements. The trial commenced on January 30, 2006, in Houston, despite repeated protests from defense attorneys calling for a change of venue on the grounds that "it was impossible to get a fair trial in Houston" — the epicenter of Enron's collapse. Enron's bankruptcy, the biggest in U.S. history when it was filed in December 2001, cost 20,000 employees their jobs and many of them their life savings. Investors lost billions of dollars. Before Lay was put on trial he was estimated to have a gross wealth of approx. 40 million US dollars. It is believed that most of it was spent on legal defense. During his trial, Lay claimed that in 2001 Enron stock made up about 90 percent of his wealth, and that his current net worth (in 2006) was in the negative by $250,000. He insisted that Enron's collapse was due to a conspiracy waged by short sellers, rogue executives, and the news media. It was reported that Lay's congenial reputation took a blow as he appeared confrontational and irritable at several points during his testimony. On May 25, 2006, Lay was found guilty on all six counts of conspiracy and fraud by a jury of eight women and four men. In a separate bench trial, Judge Lake ruled Lay was guilty of four counts of fraud and false statements. Sentencing was scheduled to take place on 11 September 2006, but was later rescheduled for 23 October 2006.

A number of books have been written on Lay and Enron including Conspiracy of Fools (2005), Icarus in the Boardroom, The Tao of Enron: Spiritual Lessons from a Fortune 500 Fallout (2002), Enron: Anatomy of Greed (2001), The Smartest Guys in the Room (2003), 24 Days, Business Fairy Tales and Power Failure. The Smartest Guys in the Room was adapted into a documentary film titled Enron: The Smartest Guys in the Room, released in 2005.