Former Enron Chiefs Found Guilty

Elena
26 May, 2006
New York City

The jury returned guilty verdicts against the two executives. Kenneth Lay was convicted of all six counts in the main trial, as well as of four charges of bank fraud and making false statements to banks in a separate non-jury trial. Skilling was convicted of 19 counts of fraud, conspiracy and insider trading.

[R]8:00AM Lay and Skilling were found guilty on Enron-related charges.[/R]
On Thursday, chairman Kenneth Lay and former president Jeffrey Skilling of former Enron Corp., were found guilty on Enron-related charges. A jury capped a four-month-long fraud and conspiracy trial, returning guilty verdicts against the two executives. Kenneth Lay, Enron''s founder, was convicted of all six counts in the main trial, as well as of four charges of bank fraud and making false statements to banks in a separate non-jury trial before U.S. District Judge Sim Lake. Skilling was convicted of 19 counts of fraud, conspiracy and insider trading. About 5 years ago Skilling sold 500,000 shares of Enron stock for $15.5 million, for which he was convicted of insider trading. He was acquitted on the remaining nine insider trading charges.

Lake set Sept. 11 as sentencing date for Skilling and Lay. Skilling faces a maximum of 185 years in prison. For Lay, the fraud and conspiracy convictions carry a combined maximum punishment of 45 years. Jurors found out that the men, who received millions in pay and stock options, had repeatedly lied to cover up accounting tricks and business failures that led to the company''s 2001 destruction. The collapse wiped out more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.

Skilling remains free on $5 million bond, which restricts him to the continental U.S. Lay submitted his passport and posted a $5 million bond secured with property. The Enron founder also was ordered to stay in the Southern District of Texas or Colorado. The government's victory caps a 4 1/2-year investigation that resulted in 16 guilty pleas from ex-Enron executives, including former Chief Financial Officer Andrew Fastow and former Chief Accounting Officer Richard Causey.


[R]7:30AM Asian stocks advance on positive overseas sentiment.[/R]
Asian markets finished higher. Japan’s benchmark Nikkei 25 Average advanced 1.77% to close at 15970.76 points. Among gainers in Tokyo were Toshiba Machine, advancing 2.8% and Nippon Steel, climbing 2.6%. Banking and other financial sector shares also recovered some of their losses Friday after Thursday’s sell-off. Resona Holdings soared 7.3% and Mitsui Sumitomo Insurance reported a 2.9% gain. Hong Kong stocks recouped, led by property and export companies. The Hong Kong’s Hang Seng Index advanced 1.3% to 15895.10. South Korea’s Composite Stock Price Index, or Kospi, finished up 2.1% at 1322.43, hitting a six-month low on Thursday. Kookmin Banksurged 7.4%, SK Telecom advanced 5.1% and Hyundai Marine & Fire Insurance rose 7.4%. Taiwan’s Weighted Price Index advanced 0.3% to 6879.51 and Shanghai Composite Index climbed 1.4% to 1613.89. The Shenzhen Composite Index advanced 2% to 404.43 and Australia''s S&P/ASX200 index gained 1.6% to 5053.7.


[R]6:30AM Europe advances in the morning on Arcelor and U.S. higher close.[/R]
European markets started higher in the morning session of trading. On the corporate front, Arcelor, still fighting a hostile takeover bid from Mittal Steel, announced that it had agreed to buy Russia’s Severstal. Despite the deal, Arcelor fell 4.1%, while its rival Mittal Steel gained 2.8%. Another steel maker, Thyssen Krupp, also added 4.2%. Natexis Banque Populaire, an investment bank soared 10% on hopes that the merger with Caisse d’Epargne’s IXIS can now proceed. Deutsche Börse jumped 3.9% and Euronext climbed 2.4% after being upgraded both by Credit Suisse to ''outperform''.

Crude oil advanced 15 cents to $71.47 a barrel by 0247 GMT; London Brent crude gained 17 cents at $70.88. Gold bullion opened Friday at a bid price of $650.80 a troy ounce, higher than $643.75 late Thursday. The dollar gained against the euro. The euro bought $1.2785 in morning European trading, down from $1.2793 in New York late Thursday. The British pound remained virtually unchanged, moving up to $1.8718 from $1.8717. The dollar advanced to 111.92 Japanese yen from 111.76 yen.