Skilling Bid to Have Charges Dropped Fails
A judge rejected former Enron Corp. Chief Executive Jeffrey K. Skilling’s request to dismiss insider trading charges pending against him in a court opinion made public Thursday.
U.S. District Judge Sim Lake, in a 26-page opinion, denied Skilling’s request to dismiss 10 counts of insider trading.
On Wednesday, the judge accepted a guilty plea to securities fraud from former top Enron accountant Richard A. Causey, who was to have gone on trial with Skilling and Enron founder Kenneth L. Lay next month.
Skilling faces 35 counts of fraud, conspiracy, insider trading and lying to auditors for allegedly knowing about or participating in schemes to manipulate Enron’s finances so investors would believe a wobbly company was healthy.
Lay, the company’s former chairman, faces seven counts of conspiracy and fraud for allegedly perpetuating the ruse after Skilling abruptly resigned in August 2001, months before Enron filed for bankruptcy in December that year.
Both Lay and Skilling have pleaded not guilty, and are slated to go to trial Jan. 30.
Causey pleaded guilty to a single count of securities fraud and agreed to help prosecutors in exchange for a seven-year prison term.
Prosecutors allege that Skilling sold $62.6 million in stock when he had information about Enron’s finances that was unknown to investors. One of the counts pertains to a stock trade he made after he had resigned from the company.
The indictment alleges further that Skilling caused Enron to enter a series of deals and transactions with off-the-books entities that allowed the company to manipulate financial results by omitting money-losing assets from the company’s balance sheet, manufacturing earnings and backdating documents to inflate investment values.
Skilling argued that the indictment failed to identify what insider information he had when he made the targeted stock trades. Lake countered that the allegations were sufficient.