Corp-Ethics.com - Report: Lay 'lied about Enron finances'

Company	Enron [Company Info]
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Date	Issue	Title
9th Mar 2006	Fraud Investigation	Lay 'lied about Enron finances'

Report

Enron's former boss lied about the state of the firm's finances months before its collapse, the company's ex-finance chief has testified.

Andrew Fastow said Ken Lay claimed that Enron's finances were robust in a interview in August 2001 despite him being aware of mounting problems.

"It was what Mr Lay was saying. It was a lie," Mr Fastow - chief prosecution witness - told jurors in Houston.

Ken Lay and ex-colleague Jeffrey Skilling deny 35 counts of fraud.

They are accused of making false statements to the media and staff about Enron's finances prior to its spectacular collapse in October 2001 but deny any wrongdoing.

In his second day of testimony, Mr Fastow said Mr Lay publicly claimed that Enron was financially sound even though Mr Fastow had told him that Enron would have to write-down the value of its assets by $1.2bn.

Asked about an interview given by Mr Lay to Business Week in August 2001 - in which Mr Lay claimed that the firm was "probably in the best shape that it has ever been" - Mr Fastow said this was not true.

"I think most of the statements in there are false," he said.

"It was what Mr Lay was saying, what the company was saying. I was trying to keep the deception up as well."

Mr Fastow said he recommended Enron undergo a major restructuring but despite a meeting with advisor Goldman Sachs, nothing came of it.

Defence lawyers for Mr Skilling - Enron's former chief executive - said Mr Fastow had showed "insatiable greed" in his dealings with Enron, having received huge kickbacks from the firm.

Mr Fastow's wife served a year in prison for submitting a tax return which did not show the income kickbacks intended for her husband.

"I believe I was extremely greedy," Mr Fastow admitted.

"I lost my moral compass and I have done terrible things that I very much regret."

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'
7th Mar 2006	Fraud Investigation	Enron	Enron bosses hid massive losses
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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