White Collar Crime in the News
Ken Lay Week

The Indictment

I plowed through this 65-page monster so you do not have to.  Most of the Indictment deals with Ken Lay's alleged co-conspirators, Richard A. Causey and Jeffrey K. Skilling.  This post will only focus the counts alleged against Ken Lay.  Unfortunately, I can't create a table using my current Blogger features, though the charges against him are organized.
The Key to the text is as follows.  First, I replaced "Charge" for "Count" because we are only worried about the case against Ken Lay here.  The "p." or "pp." symbol refers to the page number of the Indictment.  The "Count" notation in parenthesis refers to the Count charged in the Indictment.  (The Indictment charges 53 counts.  We only care about Lay's 11.)   When I say, Ken Lay did such-and-such, I refer to the government's allegations.  The text flows more smoothly when I do not constantly say "allege," "theorize," "contend," etc.  If anyone finds this confusing, please let me know.
Charge 1 - Conspiracy to Commit Securities and Wire Fraud (p. 36-39; Count 1). 
Lay agreed with Skilling and Causey to lie (or not tell the whole truth) to the Securities and Exchange Commission (SEC) and the investing public.  The three of them also agreed to use the mail, phone, fax, or video to lie to others outside of Texas.  They told these lies in order to steal.
Charges 2 & 3 - Wire Fraud: False and Misleading Statements in Employee Meetings (pp.45-46; Counts 12 & 13).
Ken Lay lied to his shareholders when he said on two videos (that were later broadcast outside of Texas) that Enron was fiscally sound.  His lied to steal in two ways.  First, by not telling the truth, he deprived shareholders, the investing public, and the SEC of his "good and honest" services.  As the Chief Executive Officer of Enron, he owed the shareholder a fiduciary duty.  He breached his fiduciary duty by not fully disclosing the state of affairs at Enron.  Second, Lay lied in order to induce members of the investing public to give money to Enron, i.e., purchase stock.
NOTE:  There are a lot of holes in these and the other charges.  I will deal with these holes and provide substantive legal analysis later on.  Remember, it's Ken Lay week.

Charges 4-7 - Securities Fraud (pp. 48-49; 27-30).
Ken Lay lied (or failed to tell the whole truth) to members of the investing public or the SEC about Enron's financial condition.  
Charge 8 - Bank Fraud (p. 53-57; Count 38).
Ken Lay lied in a loan application about what he was going to do with the money he borrowed from Bank of America.  Hence he obtained loans from Bank of American fraudently.  Regulation U prohibits a person from using loan money to purchase or carry margin stock.  Yet Ken Lay used money he borrowed from Bank of America to purchase or carry margin stock.
Charges 9-11 - False Statements to Bank (pp. 57-58; Counts 39-41). 
Ken Lay lied on bank forms.  Somewhere on the forms (in very large print I'm sure) it said, "You can't use this money we are lending you to buy or carry margin stock."  Yet Lay used the loan money to borrow margin stock.  See Charge 8, above.

Some initial thoughts...
The prosecution's case against Ken Lay has more holes than the moon has cheese.  A specially created task force, after 28 months of investigation, could only come up with 11 charges against Lay.  And as you can see, almost 30% of the case against him has absolutely nothing to do with the collapse of Enron.  I wonder if you read the fine print before signing a loan application.  
Students of the world take note!  If you use your student loan money to take a someone out on a date, you may have comitted a federal crime.  How is that for overcriminalization?