Enron Testimony Turns to Skilling’s Stock Trades

Former Enron Corp. Chief Executive Jeffrey K. Skilling was among many American shareholders who sold stock at their first opportunity in the days after the Sept. 11, 2001, terrorist attacks.

But prosecutors in his fraud and conspiracy trial allege that he sold 500,000 Enron shares on Sept. 17 that year because he had inside information that the energy company was in serious trouble -- not because he was a panicked shareholder in a roiled market.

On Monday, testimony turned to that specific trade, which raked in $15.5 million and was among 10 improper insider trades Skilling was alleged to have made.

Skilling is charged with fraud and conspiracy alongside company founder Kenneth L. Lay, but only Skilling faces charges of improper stock sales.

Earlier Monday, Lay’s legal team sought to weaken testimony from ex-Enron Treasurer Ben Glisan Jr. that Lay lied to employees and Wall Street about Enron’s finances in October 2001, weeks before the company slid into bankruptcy protection.

Regarding Skilling’s trade, stockbroker Glenn Ray testified Monday that the former CEO called him Sept. 17, 2001, and said he wanted to sell 500,000 shares.

However, Skilling had called Ray on Sept. 6 -- before the attacks -- and said he wanted to sell 200,000 Enron shares.

That sale wasn’t executed because Skilling told Ray he was no longer an officer at Enron, and therefore didn’t have to report trades to the Securities and Exchange Commission. The broker wanted a letter from Enron verifying that, and Skilling said he would get one.

Skilling resigned abruptly from Enron in mid-August 2001, citing personal reasons. Nine of Skilling’s allegedly illegal stock trades took place before he resigned. The September trade occurred more than a month later.

Glisan and other witnesses have testified that Skilling and Lay knew in 2001 that the company faced multibillion-dollar write-offs on poor assets and was propped up by accounting maneuvers rather than healthy business operations.

Skilling and Lay deny wrongdoing and attribute Enron’s failure to negative publicity and diminished market confidence.

Skilling lawyer Ron Woods tried to show his client sold stock in September because the stock market was plummeting on the first day it opened after the 9/11 attacks.

Prosecutors could rest their primary case by midweek.