Corp-Ethics.com - Report: Enron bosses hid massive losses

Company	Enron [Company Info]
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Date	Issue	Title
7th Mar 2006	Fraud Investigation	Enron bosses hid massive losses

Report

Enron's former chief financial officer has testified to setting up partnerships designed to help the firm hide losses of millions of dollars.

Andrew Fastow took the witness stand at the trial of ex-Enron bosses Jeffrey Skilling and Ken Lay.

The two deny multiple charges of conspiracy, fraud and insider trading linked to the collapse of the US energy firm in December 2001.

Mr Fastow has already pleaded guilty to conspiracy and faces 10 years in jail.

His intimate knowledge of Enron's finances make him a key witness for the prosecution.

Mr Fastow said the "LJM" partnerships - the initials are those of his wife and children - were used to buy poorly performing investments from Enron and disguise losses from investors and analysts.

"We were doing this to inflate our earnings, and I don't think we wanted to show people what we were doing," he told the court.

He said Mr Lay and Mr Skilling signed off the deals and encouraged his activities.

He described how Mr Skilling urged him to use one of the partnerships to buy a minority stake in a Brazilian power plant owned by Enron because Enron's South American unit was struggling to meet its earnings target.

Mr Fastow was rewarded with lucrative fees for handling the partnerships, but he said money was not his only motivation.

"I would look like a hero," he said, for helping Enron executives "make income targets Wall Street was setting".

Mr Lay and Mr Skilling have denied they took part in any crimes and blame Mr Fastow for Enron's collapse.

Their defence team maintains that many of the former Enron employees that have come forward as prosecution witnesses have confessed to crimes they did not commit, in the hope of getting reduced prison sentences.

Other Reports on Enron
Date	Issue	Company	Report
26th Sep 2006	Fraud Investigation	Enron	Fastow gets six-year term
13th Aug 2006	Fraud Investigation	Enron	Prosecutors raise Enron boss fine
25th May 2006	Fraud Investigation	Enron	Lay and Skilling guilty
15th May 2006	Fraud Investigation	Enron	Enron bosses 'stole to pump egos'
11th May 2006	Fraud Investigation	Enron	Judge deals blow to Enron accused
26th Apr 2006	Fraud Investigation	Enron	Enron feared witch hunt, Lay says
24th Apr 2006	Fraud Investigation	Enron	Lay 'devastated' by Enron failure
18th Apr 2006	Fraud Investigation	Enron	Skilling defends Enron share sale
13th Apr 2006	Fraud Investigation	Enron	Skilling slams Enron prosecutors
12th Apr 2006	Fraud Investigation	Enron	Enron 'held no cookie jar fund'
11th Apr 2006	Questionable Practice	Enron	Skilling denies cover-up at Enron
10th Apr 2006	Fraud Investigation	Enron	I'm innocent says ex-Enron chief
3rd Apr 2006	Fraud Investigation	Enron	Key Enron witness 'lied in court'
22nd Mar 2006	Fraud Investigation	Enron	Enron treasurer tells of 'lies'
16th Mar 2006	Fraud Investigation	Enron	Enron whistleblower condemns Lay
14th Mar 2006	Fraud Investigation	Enron	Key Enron witness 'duped bosses'
9th Mar 2006	Fraud Investigation	Enron	Lay 'lied about Enron finances'
1st Mar 2006	Fraud Investigation	Enron	Enron 'pretty fast and loose with its rules'
27th Feb 2006	Fraud Investigation	Enron	Enron money man 'raided reserves'
13th May 2005	Fraud Investigation	Enron	Former Enron executive sentenced
9th Jan 2005	Fraud Investigation	Enron	Enron bosses agree $168m payout
3rd Nov 2004	Fraud Investigation	Enron	Convictions in Enron fraud trial
28th Jun 2004	Other Issue	Enron	Enron ex-boss breaks his silence

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