ken lay’s weak defense


You know a defendant is guilty when his defense is as shaky and weird as Ken Lay’s. If Enron’s executives weren’t guilty of fraud, insider trading, and heaven-knows-what-else, what could possibly have lead to the downfall of Enron? Lay claims that it was media hype and a run on the bank. That’s right, the WSJ’s reporting of Enron’s financial situation got a little nasty, which led to mass exodus of investors, which in turn led to the collapse of the corporation. So are we to believe that the WSJ is so powerful that any time it publishes a few negative articles about a multi-billion dollar company, that company is in danger of going bankrupt? Gimme a break Lay. How can his defense team expect the jury to buy this?
From a Business Week article, law professor Dave Hoffman concurs:

I don’t know that you can just say that accurate reporting leads to the collapse of your company.

And from a post on his blog Dave adds:

To the extent that the reporting was mostly accurate, and the market reacted to it, doesn’t that mean that this wasn’t an irrational market run, but instead a reaction by the market to a perceived failure of those internal control mechanisms which Enron had been known for?

Yep, and the prosecutor will more than likely bring a finance professor to the stand to make that claim.

Written by brayden king

April 27, 2006 at 11:09 pm

Posted in brayden, current events

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  1. […] I saw the Smartest Guys in the Room tonight. The DVD arrived last week, before the sentencing of Lay and Skilling, but the coincidence made for an especially timely viewing. Brayden mentioned a couple of months ago how weird it felt watching the trial: "How can his defense team expect the jury to buy this?" Brayden asked at the time. Watching the Smartest Guys in the Room, I got the same feeling, but with more amazement: How did nobody see this coming? The depiction of the movers and shakers within Enron is of absolutely predatory financial raiders who quite literally built a business on an impossible foundation of financial shenanigans and a cult of personality around Skilling. […]


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