updated 3/28/2006 4:12:58 PM ET 2006-03-28T21:12:58

Here is a breakdown of the specific charges against Enron founder Kenneth Lay and former Chief Executive Officer Jeffrey Skilling. Both have pleaded not guilty.

A judge approved prosecutors’ request to drop three counts against Skilling and one against Lay when the government rested its case Tuesday. Skilling now faces 28 counts, and Lay faces six. Both are accused of lying about Enron’s financial health before the company filed for bankruptcy protection in December 2001 upon revelations of hidden debt and inflated profits.

Gaps in the counts appear because of those dropped Tuesday and elimination of other counts that had been pending solely against Richard Causey, former Enron chief accounting officer. Causey had been slated to go to trial alongside Lay and Skilling until he pleaded guilty Dec. 28 to one count of securities fraud. Also, the government dropped four wire fraud counts that had been pending against Skilling shortly before the trial began because they were related to charges against Causey.

The government rested its case midway through the ninth week on Tuesday. Jurors won’t return until Monday, when the defense teams begin presenting their case. Both Lay and Skilling say they will testify.

COUNT 1: Conspiracy to commit securities and wire fraud, against Lay and Skilling. Covers alleged acts from late 1999 through December 2001. Skilling allegedly approved quarterly and annual reports submitted to the Securities and Exchange Commission that misstated revenues and earnings and conducted misleading quarterly conference calls with Wall Street analysts. Lay allegedly lied to employees, credit rating agencies and analysts with claims that Enron was healthy or that its books had been sanitized of problems when he knew otherwise.

COUNT 2: Securities fraud, against Skilling. Stems from so-called Raptors, four financial structures backed by Enron stock used to hedge inflated asset values and keep hundreds of millions of dollars in debt off the energy company’s books. Prosecutors say Skilling knew the Raptors were wrongly treated as independent of Enron, so should not have been kept off Enron’s books, and that they were used to avoid public disclosure of decreases in asset values.

COUNTS 12-13: Wire fraud, against Lay. Stems from alleged false statements made to Enron employees via the Internet or video teleconference. Prosecutors allege that as Lay assured employees in a September 2001 online forum that third-quarter performance was “looking great” and “we will hit our numbers,” he knew Enron in mid-October would announce a massive loss and a $1.2 billion writedown in shareholder equity. The government also alleges that while Lay told analysts in a conference call days after the negative earnings announcement that he was disclosing all the bad news he had found, he held back information on dire problems.

COUNTS 14, 16-20: Securities fraud, against Skilling. Stems from quarterly and annual reports filed with the SEC in 2000 and 2001. Prosecutors allege Skilling knew those reports were intentionally misleading about Enron’s revenues, earnings and business operations because accounting schemes hid the true picture.

COUNTS 22-26: Securities fraud, against Skilling. Allege Skilling omitted bad news or lied when he said Enron’s revenues from energy trading in California were small while touting Enron’s performance and financial health to analysts in several conference calls and an analyst conference in 2000 and 2001.

COUNTS 27-29: Securities fraud, against Lay. Allege Lay misled a credit rating agency representative days before Enron announced massive quarterly losses, saying Enron’s books were clean when he knew otherwise. Also allege that on two subsequent conference calls with analysts after the losses were announced that Lay minimized their impact and lied, claiming Enron wasn’t hiding anything when he knew the company’s financial health was worse than disclosed.

COUNTS 31-32: False statements to auditors, against Skilling. Alleges he signed letters to auditors at Arthur Andersen LLP that were misleading about the veracity of Enron’s annual financial statements in 2000 and 2001.

COUNTS 34-36: False statements to auditors, against Skilling. Alleges he signed letters to auditors that were misleading about the veracity of Enron’s quarterly financial statements for the middle two quarters of 2000 and the first quarter of 2001.

COUNTS 42-51: Insider trading, against Skilling. Alleges Skilling sold $62.6 million in stock when he knew Enron shares were inflated by internal efforts to hide the company’s true financial condition. The counts pertain to nine trades from April through November in 2000 and a single trade in September 2001 about a month after he resigned from Enron.

COUNTS 38-41, one count of bank fraud and three counts of making false statements to banks, against Lay, pertain to his personal banking. The charges allege he obtained $75 million in loans from three banks and then reneged on an agreement with the lenders that he wouldn’t use the money to carry or buy Enron stock on margin. Lay will face trial without a jury before U.S. District Judge Sim Lake on these charges shortly after jurors in the conspiracy case against him and Skilling begin deliberations, which are expected to be lengthy. The bank fraud bench trial is expected to last less than two weeks.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 2.48%
$30K home equity loan FICO 5.80%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.57%
13.57%
Cash Back Cards 17.91%
17.91%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com