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Ken Lay, the George Bush friend headed for prison for his part in the collapse of energy giant Enron and the fraud that cost many investors everything they had, evaded jail the hard way, dying of a heart attack Wednesday morning.
Reports The Street:
Kenneth Lay, the former Enron chief executive who was convicted in May of criminal fraud and conspiracy, has died, CNBC reported Wednesday. He was 64.
Lay died of a heart attack in Aspen, Colo., CNBC said.
On May 25, a federal jury convicted Lay on one count of conspiracy, two of wire fraud and three counts of securities fraud in the collapse of Enron, which he founded and led into bankruptcy in December 2001. He was scheduled to be sentenced in October.
Lay and his protege, former Enron CEO Jeff Skilling, denied wrongdoing in the scandal, which put tens of thousands of people out of work and cost many employees their life savings. Billions of dollars of market capitalization was erased by the insolvency
During the trail, prosecutors painted Skilling as a participant in Enron’s duplicity and Lay as someone willing to both conceal and profit from the company’s illegal tactics. .
Forbes offers a not-so-flattering look at Lay’s corrupt legacy:
In Norse mythology, Valhalla is the hall where slain heroes spend eternity. For Kenneth Lay, Valhalla was the small town near New York City where the newly minted chief of the newly created Enron got his first test in corporate ethics–and failed.
Lay, 64, died early Wednesday morning of a heart attack at his vacation home in Aspen, Colo. His death came a little more than a month after he and former Enron Chief Executive Jeffrey Skilling were convicted of fraud linked to the collapse of the Houston energy company in 2001. Lay faced up to 45 years in prison, most likely a life sentence.
Enron’s fall was shocking but not a complete surprise to former employees and other longtime observers of the company Lay founded through the merger of two gas pipeline concerns in 1985.
Less than two years after Enron was formed, a trader in the company’s Valhalla office lost hundreds of millions of dollars betting the wrong way on crude oil. The company, at Lay’s bidding, hid the damage from investors until executives had worked it down to a more manageable $85 million.
It was an early–disturbingly early–sign that Lay was willing to do almost anything to protect his company from disclosures that could tank its stock price. As Enron grew into a trading firm under the intellectual leadership of Skilling, a former McKinsey & Co. consultant, faith in the company’s finances was critical to maintaining the thousands of transactions with counterparties that fueled increases in revenue and earnings.