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In their sixth day of deliberations, a federal court jury in Houston found former Enron Corp. Chairman Kenneth Lay guilty of all six charges against him and former Chief Executive Officer Jeffrey Skilling guilty on 19 out of 28 charges that he faced. Jurors found Skilling not guilty of nine insider-trading charges against him. Upon hearing the May 25 verdict, Skilling showed little emotion. Lay’s daughter and wife cried as the verdict was read. Sentencing is set for Sept. 11. U.S. District Judge Sim Lake presided over the 16-week jury trial, held in the Bob Casey U.S. Courthouse, located just a few blocks from the 50-story Enron Center skyscraper where Lay and Skilling once reigned as powerful executives at Enron. In the jury trial, prosecutors alleged Lay and Skilling participated in a conspiracy to misrepresent the true financial condition of Enron. The indictment in United States v. Jeffrey K. Skilling, et al. alleged Lay and Skilling “engaged in a wide-ranging scheme” to deceive investors, including Enron shareholders and the Securities and Exchange Commission, about the true performance of Enron by manipulating public financial reports, making “false and misleading” public statements about the company’s financial performance, and failing to disclose facts that would make those statements and representations fair and accurate. Skilling and Lay had pleaded not guilty. They blamed Enron’s problems on criminal acts by former Enron Chief Financial Officer Andrew Fastow. In 2004, Fastow pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit wire and securities fraud. Also on May 25, in a separate bench trial, Lake found Lay guilty of four bank fraud charges. On May 18, Lake started hearing evidence on four bank fraud criminal charges against Lay. In 2005, Lay had asked for a separate trial from Skilling, but Lake only granted a separate trial on the bank fraud charges. Lay was accused of violating a federal banking regulatory rule by using up to $75 million in loans from Bank of America, Chase Bank of Texas and Compass Bank, from 1999 to 2001, to buy stock. According to the indictment, Lay signed loan forms known as Form U-1, which would require him to state that he will not use loan proceeds to buy stock on margin. But the indictment in United States v. Jeffrey K. Skilling, et al., alleged he did so.
Brenda Sapino Jeffreys is a senior reporter with Texas Lawyer , the ALM publication where this article first appeared.

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