Who is kenneth lay

In a time of power outages and oil embargoes there was much for Lay to work on, but he saw the energy crises of the s as opportunities for business and thus applied for a job at Florida Gas in September The chief executive officer W. Bowen hired Lay as vice president in charge of corporate planning in Lay quickly rose to corporate president in In he moved on to a bigger company and a higher salary at The Continental Group.

In he asked his wife for a separation; he was having an affair with his secretary Linda Ann Herrold. The divorce was a bitter one, with custody of the children hotly contested and Judith suffering a nervous breakdown that required hospitalization.

But Lay's winning personality made people love being around him, and within a few years after —when the divorce became final and Lay married his lover—Judith and the children mingled with Lay and his new wife for Christmases in Aspen. By Lay seemed to have all he wanted. It was in , after he became CEO, that Lay seized his biggest opportunity. In Omaha, Nebraska, Samuel F.

Segnar, the CEO of the pipeline company InterNorth, and other company officers were distressed by the venture capitalist Irwin Jacobs, who had bought about one-third of their company's shares.

They feared that Jacobs would take over the company. Thus, they looked for a way to turn InterNorth into a poisoned pill.

Segnar and his co-workers made an astonishing blunder, however: as part of their agreement with Houston Natural Gas they gave former HNG officers more seats on the new board of directors than were given to former InterNorth officers. The entire turn of events became ironic when Jacobs said that he had never intended to take over InterNorth; he had just invested in what he regarded as a growth stock. He used his Washington connections and had Enron make political donations in order to influence Congress to make natural gas an unregulated, tradeable commodity.

In January a bank contacted Enron, warning that the division in charge of managing the company's crude-oil business had opened an account with a suspicious amount of activity.

Oddly, Lay seemed unconcerned. The employees who owned the account, Louis Borget and Thomas Mastroeni, were given a clean bill of ethical health by Enron's board of directors. In fact, Borget and Mastroeni were running a scam to make profits look bigger than they actually were by creating trades with dummy corporations, enriching themselves in the process through their mysterious account.

Yet, New York banks bailed Enron out with new loans. In Borget and Mastroeni pleaded guilty to charges of fraud. In , as natural gas was deregulated, Lay created the Gas Bank. The idea was to form a bridge between producer and consumer. Natural gas had been subject to large increases and drops in prices, and producers were reluctant to sign long-term contracts for fear that they would miss out on the next big upward spike in prices. The Gas Bank was intended to guarantee consumers long-term supplies at set rates while stockpiling reserves of natural gas bought from producers.

While the Gas Bank never made much of a profit, as producers were suspicious of its potential for dampening prices, it set the stage for Enron's worst years. He was becoming an important Houston civic leader by investing in charities. He maintained his innocence til the end. Lay was born in Tyrone, Missouri. His father, Omer, was a Baptist minister who made money from selling farm equipment and working at a department store.

His parents had little formal educaton. Lay did what he could to suplement the family income, delivering newspapers and moving lawns. It was so different from the world in which I was living. Lay began his career at the oil major Exxon in as an economist. After a spell in the US navy, he had his first brush with government, serving as under-secretary for energy For the next eight years, he held various executive positions in the oil industry, including, fatefully, at Houston Natural Gas.

In , the company merged with a rival, InterNorth, and was renamed Enron. Lay became chief executive. Kenneth Lee Lay, was the son of a rural Baptist preacher who rose to the pinnacle of corporate America as chairman of Enron Corporation before falling to become a symbol of corporate greed, and malfeasance.

Omer Lay was an itinerant tradesman and lay preacher who moved the family frequently in pursuit of opportunity for his vocations.

The family never achieved financial security although it was a hard-working and close-knit group. When Lay was a small child the family's fledgling chicken business was wiped out when a truck accident destroyed their brood stock before it could be delivered. Lay tried to contribute to the family's fortunes by delivering newspapers, cutting grass, and working at farm chores. Lay earned a scholarship to the University of Missouri where he studied economics. While an undergraduate, he developed a mentor in Professor Pinkney Walker.

Lay completed his masters degree in economics under Walker in He eventually obtained his Ph. He married his college sweetheart, Judith Ayers, and they had two children.

He was assigned to the Pentagon, upon the recommendation of Pinkney Walker, and served as an economist for two years in Washington D. He worked on studies about military procurement and was introduced to the ways of Washington. His Pentagon work provided a rich source of data for Lay's Ph. By Oct. This action caught the attention of the SEC. A few days later, Enron changed pension plan administrators, essentially forbidding employees from selling their shares for at least 30 days.

Fastow was fired from the company that day. Also, the company restated earnings going back to By Dec. Once Enron's Plan of Reorganization was approved by the U. The company's new sole mission was "to reorganize and liquidate certain of the operations and assets of the 'pre-bankruptcy' Enron for the benefit of creditors.

Its last payout was in May Arthur Andersen was one of the first casualties of Enron's notorious demise. In June , the firm was found guilty of obstructing justice for shredding Enron's financial documents to conceal them from the SEC. Several of Enron's executives were charged with conspiracy, insider trading, and securities fraud. Enron's founder and former CEO Kenneth Lay were convicted on six counts of fraud and conspiracy and four counts of bank fraud. Prior to sentencing, he died of a heart attack in Colorado.

Enron's former star CFO Andrew Fastow pled guilty to two counts of wire fraud and securities fraud for facilitating Enron's corrupt business practices. He ultimately cut a deal for cooperating with federal authorities and served more than five years in prison.

He was released from prison in In , Skilling was convicted of conspiracy, fraud, and insider trading. Enron's collapse and the financial havoc it wreaked on its shareholders and employees led to new regulations and legislation to promote the accuracy of financial reporting for publicly held companies. In July , President George W. Bush signed into law the Sarbanes-Oxley Act. The act heightened the consequences for destroying, altering, or fabricating financial statements and for trying to defraud shareholders.

As one researcher states, the Sarbanes-Oxley Act is a "mirror image of Enron: the company's perceived corporate governance failings are matched virtually point for point in the principal provisions of the act.

The Enron scandal resulted in other new compliance measures. Moreover, company boards of directors became more independent, monitoring the audit companies, and quickly replacing poor managers.

These new measures are important mechanisms to spot and close loopholes that companies have used to avoid accountability. At the time, Enron's collapse was the biggest corporate bankruptcy to ever hit the financial world since then, the failures of WorldCom, Lehman Brothers, and Washington Mutual have surpassed it.

Increased regulation and oversight have been enacted to help prevent corporate scandals of Enron's magnitude. However, some companies are still reeling from the damage caused by Enron. Joint Committee on Taxation. Accessed Jan. Securities and Exchange Commission. Andrew S. Texas State Historical Association.

Federal Reserve Bank of St. Committee on Governmental Affairs. Commodities Futures and Trading Commission. Department of Justice. Skilling, Richard A.