Enron's Lay and Skilling guilty of fraud and conspiracy

Enron's former chairman Kenneth Lay and chief executive Jeffrey Skilling were found guilty of conspiracy and fraud today by a Houston jury.

Lay was convicted on six counts of conspiracy and fraud; Skilling on 20 counts of conspiracy, false statements, fraud and insider trading. In a related trial, Lay was also found guilty on four more counts of false statements.

After former chief finance officer Andrew Fastow took a plea bargain in exchange for testifying against Lay and Skilling, the jury found that the two men had lied to investors to deceive them about the company's true financial position.

Lay and Skilling lied to keep the company's credit rating high - maintaining an investment-grade rating was vital to Enron - and to avoid sanction by the Securities and Exchange Commission, the court found. They produced falsified earnings reports, concealed losses and bad debts, and attempted to prop up the company's stock when it started to decline in 2001, the court added.

A sentence has not yet been announced, but both men could be facing lengthy prison terms. Both pleaded not guilty throughout the trial, saying that their behaviour had been within the bounds of accounting law and that any wrongdoing was the fault of Fastow.