If he had to pay off loans, he should have used his Compaq stock ($8 million !!!!). He should not have used the Enron stock he knew would be utterly worthless once the SEC forced him to tell the truth.
He's just a rick with a p in front.
Don't misunderstand. I'm not defending Ken Lay but the heading is incorrect. Lay didn't say this. His lawyer said it. We all know how lawyers lie.
this is accountingese for PONZI SCEME!!!! ROFLMAO
Flat Tax. 10%. No deductions, everyone pays. Simple as that.
Over the period of Jan 2001 through July 31, Lay made approximately 360 (yeah - three hundred sixty) trades in Enron stock. It was like he was day-trading in his own company! Then suddenly on August 1st, the trade flurry stopped -- a couple more trades on Aug. 20-21, and that was the end of the list (there's a delay before listings are made, so one can't be certain of trades after October, but clearly something happened to slow the tide of trades after July).
So it's pretty obvious that something wierd was going on -- that's a crazy amount of trading. It's really to the point at which one would have to question whether the CEO/Chairman of the Board was paying any attention to his primary job... but certainly he knew (above anyone) exactly where the stock price stood -- probably on an hourly basis!
A more likely reason is that his stock options were probably no longer "in the money", meaning the strike price was above what the current trading price of the stock was.
As far as these loans from Enron, I think it will be revealed that these were actually a disguised form of compensation. I don't know for sure, but I imagine it worked this way:
You issue a "loan" to Lay, along with stock options sufficient to repay it. The stock options aren't taxed until they're exercised, and you don't pay tax on money you've borrowed. If the "loan" is used for investment purposes, you even get to deduct the interest from your income tax.
It's a sweet deal that most of us don't get from the company we work for.
But to all those who say that Ken Lay belongs in jail, I have just one question. For what crime?
It may not be as easy to pin anything on him as some here believe. It's not at all clear, for example, that the phony accounting was illegal. It's not going to be easy to prove that his stock sales were insider trading, especially if they were part of "program sales" in which he announced his irrevocable intention to sell shares in the future.
Don't misunderstand me. I'm not trying to defend this creep, and I think the political pressure will be strong enough that he gets indicted for something. But don't be shocked if it doesn't stick. He may be liable civilly for some damages, but criminal charges will be much more difficult to show unless we uncover some new damning evidence.
Jail time is appropriate - but unlikely.
Lay will probably be on the lecture tour in a couple of years.
The employees should get a class action lawsuit and sue Lay and any of the other executives that are involved. If only to tie them up with legal fees for years to come.
Richard W.