Wednesday, February 01, 2006

Enron Trial: It's the Lies Stupid

Enron Task Force prosecutor John Hueston has the right idea in his opening statement as reported in the Houston Chronicle:
"This is a simple case. It is not about accounting, it is about lies and choices," Hueston said, adding that when shareholders buy stock they buy the right to trust the top company officers.
Instead of getting bogged down in the fiendishly complicated accounting contraptions used to make losses go away, prosecutors are focusing on the reason for the mad machinations: Enron's obsession with lifting its share price far beyond any rational number. The company even had a ticker flashing the share price in its elevators. Unlike the elevators, the share price was expected to keep rising forever.
The first witness up today isn't an accountant, but Mark Koenig, Enron's top investor relations exec, who will likely describe the rosy scenarios painted for Wall Street while the company's unstable financial structure was collapsing.
Daniel Petrocelli, representing Jeff Skilling, may be helping the prosecution by repeating the assertion that there was nothing wrong with Enron:
"Enron was no house of cards. ... It was a wonderful company, a shining star," Petrocelli said.
The choice for the jury may come down to a simple question: Was Enron in good shape or not? If not they may conclude that Skilling and Lay are still lying.

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