Risk & Compliance

Two Trials for Kenneth Lay

The former chairman of Enron Corp. had asked to be tried separately from his onetime CEO and the company's former top accountant. The judge, by gra...
Stephen TaubOctober 21, 2004

Former Enron Corp. chairman Kenneth Lay will face not one criminal trial, but two.

Lay, former Enron chief executive officer Jeffrey Skilling, and former chief accountant Rick Causey had requested separate trials in federal court in Houston. U.S. District Judge Sim Lake did rule that the four criminal charges regarding Lay’s personal finances — he allegedly misled banks about using loans to buy Enron stock on margin, according to the Associated Press — will be tried separately from the company-related charges faced by all three defendants.

The wire service reported, however, that in a separate case, the three defendants will be tried together. Lay will face seven charges relating to fraud and conspiracy; Skilling and Causey will each face more than 30 counts, including conspiracy, insider trading, fraud, and lying to auditors.

“This is Ken Lay’s worst nightmare. The government gets two bites at the apple,” said former federal prosecutor Jacob Frenkel, according to the Houston Chronicle. “First, it’s much easier to point fingers at people who aren’t sitting next to you in the courtroom, and second, if he’s convicted in one case and then faces the second, it becomes harder still for Lay.”

Lay defense attorney Mike Ramsey told the Chronicle he was disappointed that the government passed up “an opportunity” to try his client separately and immediately; Lay had even offered to skip a jury trial to expedite matters, according to the AP.

Trial dates have not been set.

In news involving another high-profile case, the U.S. Second Circuit Court of Appeals ruled on Tuesday that Frank Quattrone can remain free while he appeals his conviction for obstruction of justice, according to Reuters. The former investment banker for Credit Suisse First Boston had been scheduled to begin serving an 18-month prison sentence next week.

Also on Tuesday, a federal judge in Manhattan delayed the trial of former WorldCom chief executive officer Bernard Ebbers by two months, to January 17, to give the defense team more time to prepare its case. However, U.S. District Judge Barbara Jones warned that she would not allow any further delays.