The trial of the key defendants in one of the world’s most infamous corporate scandals has begun with the jury selection in the trial of former Enron chief executive Jeff Skilling and founder and former chairman Kenneth Lay.
Skilling faces 31 counts of fraud, conspiracy, insider trading and lying to auditors about Enron’s financial position, while Lay faces seven counts of fraud and conspiracy.
Both men deny the charges and are expected to argue ignorance, instead implicating former finance chief Andrew Fastow, who like other senior executives struck a plea bargain with prosecutors and is expected to give evidence against Lay and Skilling.
The Houston, Texas, trial, which is expected to last four months, has already heard that both Lay and Skilling were deeply involved in the fraud with the testimony of Mark Koenig, former head of investor relations. According to Koenig, Skilling ordered earnings per share figures to be increased to ¢34 from ¢32 in July 2000. Koenig is one of 16 former Enron executives who have turned state’s evidence after pleading guilty to crimes related to the fraud.
Enron is the biggest Chapter 11 bankruptcy in US history and the company remains a symbol of corporate greed, with the scandal prompting the passage of the sweeping anti-fraud legislation the Sarbanes- Oxley Act.
The only remaining defendants are Lay, Skilling and Northern Trust, trustee of Enron’s looted retirement funds. If convicted on all counts, the two main defendants are likely to spend most of the rest of their lives in jail.