A Houston jury convicted former Enron chairman Kenneth Lay and president Jeffrey Skilling May 25 of conspiracy and fraud that led to the company's 2001 demise. In the wake of that verdict, white collar crime and securities litigation experts weighed in on why the jury found Skilling and Lay guilty, and the impact of that decision upon other U.S. executives.
"The verdicts send a clear message to senior company executives that 'ostrich' defenses will no longer work, and that juries will hold them to a standard of reasonable knowledge," said Scott Meyers, a partner in the Securities Practice at Levenfeld Pearlstein in Chicago. "The lesson to take away from this case is that ... a smoke and mirrors defense will not fool a jury."
Other observers credited the prosecution strategy for the convictions. "The verdict was an overwhelming vindication of the government's Enron prosecution," said Sheldon Zenner, partner and co-chair of the white collar criminal and civil litigation practice at Katten Muchin Rosenman in Chicago. "They avoided complicating the case, and brilliantly executed their game plan. They didn't try to be flashy or generate headlines every day of the trial, and ultimately, the only headline that matters is the one they got today."