Kenneth Lay
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Kenneth Lee "Ken" Lay (April 15, 1942 – July 5, 2006), was an American businessman, best known for his role in the widely-reported corruption scandal that led to the downfall of Enron Corporation. Lay and Enron became synonymous with corporate abuse and accounting fraud when the scandal broke in 2001. Lay was the CEO and chairman of Enron from 1986 until his resignation on January 23, 2002, except for a few months in 2001 when he was chairman and Jeffrey Skilling was CEO.
On July 7, 2004, Lay was indicted by a grand jury on 11 counts of securities fraud and related charges. On January 31, 2006, following four and a half years of preparation by government prosecutors, Lay's and Skilling's trial began in Houston. Lay was found guilty on May 25, 2006, of 10 counts against him; the judge dismissed the 11th. Because each count carried a maximum 5- to 10-year sentence, legal experts said Lay could have faced 20 to 30 years in prison. However, he died while vacationing in Old Snowmass, Colorado on July 5, 2006, about 3.5 months before his scheduled October 23 sentencing. Preliminary autopsy reports state that he died of a heart attack caused by coronary artery disease. Toxicology reports are to be released in the following weeks.Carrie Johnson, [Enron's Lay Dies Of Heart Attack], Washington Post, 6 July 2006.
Early life and career
Lay was born into a poor family in Tyrone, Missouri. When he was a child Ken delivered newspapers and mowed lawns. His father, Omer, was a Baptist preacher and some-time tractor salesman. He attended the University of Missouri where he studied economics. He has been described by his undergraduate classmates at the University of Missouri-Columbia as industrious and high-minded[[Citing sources citation needed]], and served as president of the Zeta Phi chapter of the Beta Theta Pi fraternity at the University of Missouri. He got his doctorate in economics at University of Houston in 1970 and went to work at Exxon Mobil Corp. predecessor Humble Oil & Refining upon graduation.Lay worked in the early ‘70s as a federal energy regulator. He then became undersecretary for the Department of the Interior before he returned to the business world as an executive at Florida Gas. By the time of the Reagan administration, when energy was deregulated, Lay was already an energy company executive and he took advantage of the new climate by merging Houston Natural Gas Co. with Nebraska-based Inter-North to form Enron in 1985.
Lay was one of America's highest-paid CEOs, earning (for example) a $42.4 million compensation package in 1999. He dumped large amounts of his Enron stock in September and October of 2001 as its price fell, while encouraging employees to buy more stock, telling them the company would rebound. Lay liquidated more than $300 million in Enron stock from 1989 to 2001, mostly in stock options.
Lay had been married to his wife, Linda, for 24 years and had two children, three step-children and twelve grandchildren.
Indictment and trial
On July 7, 2004, Lay was indicted by a grand jury in Houston, Texas, for his role in Enron's collapse. Lay was charged, in a 65-page indictment, with 11 counts of securities fraud, wire fraud, and making false and misleading statements. The trial commenced on January 30, 2006, in Houston, despite repeated protests from defense attorneys calling for a change of venue on the grounds that that "it was impossible to get a fair trial in Houston – the epicenter of Enron's collapse. Enron's bankruptcy, the biggest in U.S. history when it was filed in December 2001, cost 4,000 employees their jobs and many of them their life savings. Investors lost billions."During his trial, Lay claimed that in 2001 Enron stock made up about 90 percent of his wealth, and that his current net worth (in 2006) was in the negative by $250,000. He insisted that Enron's collapse was due to a "conspiracy" waged by short sellers, rogue executives, and the news media. It was reported that Lay's congenial reputation took a blow as he appeared confrontational and irritable at several points during his testimony. On May 25, 2006, Lay was found guilty on all six counts of conspiracy and fraud by a jury of eight women and four men. In a separate bench trial, Judge Lake ruled Lay was guilty of four counts of fraud and false statements. Sentencing was scheduled to take place on 11 September 2006, but was later rescheduled for 23 October 2006.
A number of books have been written on Lay and Enron including Conspiracy of Fools (2005), Icarus in the Boardroom, The Smartest Guys in the Room (2003), and 24 Days. The Smartest Guys in the Room was adapted into a documentary film titled , released in 2005.
Death and abatement of conviction
While vacationing in Colorado on July 5, 2006, Kenneth Lay died. The Pitkin Sheriff’s Department confirmed that officers were called to Lay’s house in Old Snowmass, Colorado, near Aspen at 1:41 AM MDT. Lay was taken to Aspen Valley Hospital, where he was pronounced dead at 3:11 AM MDT. Autopsies indicate that he died of a heart attack brought on by coronary artery disease, and found evidence that he had suffered another heart attack previously. Pending toxicology reports will be completed later in July.
Since Lay died prior to exhausting his appeals, according to Roma Theus of the Defense Research Institute (an organization of defense attorneys), his conviction is considered abated pursuant to precedent in the Fifth Circuit Court of Appeals, the federal appellate court governing the district where Lay was indicted;See [United States v. Asset] (#redirect ), 990 F.2d 208 (5th Cir. 1993); [United States v. Estate of Parsons] (#redirect ), 367 F.3d 409 (5th Cir. 2004). however a formal filing must first be made. When abatement occurs the law would view it as though he had never been indicted, tried and convicted.[Can't the Feds Get Lay's Money?] Slate, as corrected July 7, 2006. Civil suits are expected to continue against Lay's estate. However, according to another legal expert, claimants may not seek punitive damages against a deceased defendant, only compensatory damages.
A private funeral with around 200 in attendance was held in Aspen four days after his death, his body cremated and the ashes buried in the mountains. A memorial was held a week after his death at the First United Methodist Church in Houston, attended by nearly 1,200 guests including former president George H. W. Bush. The speakers who touched on Lay's conviction were unanimous in their defense of Lay; former Enron President and "longtime friend" Mick Seidl spoke, describing Lay as a "straight arrow -- a Boy Scout, if you will -- who lived by Christian-Judeo principles," adding "I am saddened he will be remembered for the Enron indictment and trial," and "An overzealous federal prosecutor and the media have vilified a good man. It was total character assassination." Rev. William A. Lawson, "a veteran local civil rights leader with whom Lay worked during Enron's heyday to support projects in Houston's black community" went so far as to claim "Ken Lay was neither black nor poor, but he was a victim of a lynching" and even compared Lay with Martin Luther King, Jr. and Jesus.
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