A Collaboration with the University of Pittsburgh

Former Enron head blames ex-CFO for fraud, bankruptcy

[JURIST] Former Enron chairman Kenneth Lay [defense website] said Tuesday that the company's former CEO Andrew Fastow [BBC profile] was to blame for the accounting fraud that led to the company's downfall and that his trust in Fastow was "fatally displaced". Lay's speech [text] at a Houston business luncheon foreshadowed his defense at his upcoming trial on criminal fraud charges [PDF indictment], set to begin January 17. Lay attacked the prosecutors in the case, saying they are obscuring the truth behind a "wave of terror" and that witnesses are too scared to come forward on Lay's behalf. Lay said that Enron's 2001 bankruptcy was due to the "despicable and criminal deeds" of Fastow and a small group of Fastow's cohorts. Andrew Fastow pleaded guilty to conspiracy charges in 2004 and is still awaiting sentencing; his wife Lea Fastow was released from prison [JURIST report] earlier this year after serving a one year sentence for filing a false federal tax return related to money she and her husband received from Enron financial dealings. BBC News has more. The Houston Chronicle has local coverage.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.