A judge rejected former Enron CEO Jeffrey Skilling's request to dismiss insider-trading charges pending against him in a court opinion made...
HOUSTON — A judge rejected former Enron CEO Jeffrey Skilling’s request to dismiss insider-trading charges pending against him in a court opinion made public Thursday.
U.S. District Judge Sim Lake, in a 26-page opinion, denied Skilling’s request to dismiss 10 counts of insider trading.
On Wednesday, Lake accepted a guilty plea to securities fraud from former top Enron accountant Richard Causey, who was to go on trial alongside Skilling and Enron founder Kenneth Lay next month.
Skilling faces 35 counts of fraud, conspiracy, insider trading and lying to auditors for allegedly knowing about or participating in schemes to manipulate Enron’s finances so investors would believe a wobbly company was healthy. Lay faces seven counts of conspiracy and fraud for allegedly perpetuating the ruse after Skilling abruptly resigned in August 2001, less than three months before Enron went bankrupt in December that year.
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Both have pleaded not guilty, and are slated to go to trial Jan. 30.
The indictment alleges Skilling sold $62.6 million in stock when he had information about Enron’s finances that was unknown to investors.
The indictment alleges further that Skilling caused Enron to enter a series of deals and transactions with off-the-books entities that allowed the company to manipulate financial results by omitting money-losing assets from the company’s balance sheet, manufacturing earnings and backdating documents to inflate investment values.
Skilling argued that the indictment failed to identify what insider information he had when he made the targeted stock trades. Lake countered that the allegations were sufficient.
The judge also denied Skilling’s request that a paragraph pertaining to a securities-fraud count be stricken.