Lay acknowledges giving false impression

April 27, 2006 at 9:06 PM
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HOUSTON, April 27 (UPI) -- Kenneth Lay defended his failure to report his sales of Enron stock in 2001 as he spent a second day under cross-examination Thursday in Houston.

Lay told assistant U.S. Attorney John Hueston he was advised by the Enron lawyer specializing in Securities and Exchange Commission regulations that he did not need to report the sales until the end of the year, The Washington Post reported.

Under questioning, he admitted that his delay left the public with the impression that his holdings in Enron remained the same -- or possibly grew a little -- by the end of the year when he had, in fact, sold $70 million in company stock.

One of the founders of the energy giant, Lay faces six counts of fraud while his co-defendant, Jeffrey Skilling, is charged with 28 counts. The two men blame Enron's collapse on Andrew Fastow, the chief financial officer turned prosecution witness, unfriendly media coverage and short sellers.

Hueston asked Lay about short sales by his own son.

"He wasn't trying to kill Enron in 2001, was he?" Hueston asked.

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