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Enron ex-CEO Lay pleads not guilty

Lay maintained his innocence at a news conference Thursday.
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Lay indicted by a grand jury in Houston. CNN's Ed Lavandera reports (July 7)
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WASHINGTON (CNN) -- Former Enron Chairman and CEO Kenneth Lay has pleaded not guilty to 11 criminal charges related to the company's 2001 collapse into bankruptcy. Lay was released on a $500,000 bond.

In a related move, the Securities and Exchange Commission accused Lay in a civil complaint that seeks more than $90 million.

At a news conference Thursday afternoon Lay maintained his innocence and blamed his deputies for misleading him. He said he was ready for a "speedy trial" in September.

"I continue to grieve, as does my family, over the loss of the company and my failure to be able to save it," said Lay, speaking forcefully. "But failure does not equate to a crime."

He said he felt sorry for ordinary families who lost money in the collapse.

Enron, once the seventh-largest U.S. company, filed for bankruptcy in December 2001 after investigators found it had concealed more than $1 billion in debt and inflate profits.

Its fall from grace wiped out the savings of thousands of stockholders and shook the confidence of U.S. investors in the government's ability to regulate big business.

On Thursday the Securities and Exchange Commission accused former chairman and CEO Kenneth Lay of fraud by "falsifying Enron's publicly reported financial results and making false and misleading public representations about Enron's business performance and financial condition."

Also indicted were Enron former President and CEO Jeffrey K. Skilling and former Chief Accounting Officer Richard A. Causey.

They are accused of "manipulating Enron's publicly reported financial results, and making public statements about Enron's financial performance and results that were false and misleading," the indictment said.

The 53-count, 65-page indictment covers a broad range of financial crimes, including bank fraud, making false statements to banks and auditors, securities fraud, wire fraud, money laundering, money laundering conspiracy and insider trading.

The SEC also alleged that Lay sold large amounts of Enron stock at inflated prices at a time that he possessed non-public information about Enron's financial condition, making more than $90 million during 2001.

"Specifically, Lay sold over $70 million in Enron stock back to the company to repay cash advances on an unsecured Enron line of credit," the SEC said in a statement.

"In addition, while in possession of material non-public information, Lay amended two program trading plans to enable him to sell an additional $20 million in Enron stock in the open market.

Lay's proceeds from the sales constitute illegal gains resulting from his scheme to defraud."

The SEC said it was seeking more than $90 million from Lay in addition to civil fines and his permanent bar from serving as a director or officer of a publicly held company.

"From the very beginning, our mandate has been to hold accountable those who contributed to the false portrayal of Enron as a viable, thriving entity," said SEC Enforcement Division Director Stephen M. Cutler.

"As Enron's chairman and chief executive officer, Mr. Lay was an engaged participant in the ongoing fraud, and must therefore be called to account for his actions."

The indictment was unsealed several hours after Lay surrendered to federal authorities in Houston, a day after a grand jury indicted him.

Lay appeared at the FBI office just after 7 a.m. ET (1100 GMT) on Thursday. He was later led away to the federal courthouse, his hands cuffed behind his back.

"I have done nothing wrong, and the indictment is not justified," Lay said through his spokeswoman.

"We are ready for trial," Lay lawyer Mike Ramsey told reporters. "We don't even need to go through the discovery process. We don't need their documents. We've got them all."

He said he would file a motion Thursday seeking the release of Lay -- who had been close to U.S. President George W. Bush and contributed to his campaign -- on his own recognizance.

'Supporter in past'

In Washington, White House Press Secretary Scott McClellan told reporters that "it's been quite some time" since Bush spoke with Lay.

Asked if the White House played any role in the decision to indict Lay, McClellan said, "This is a DOJ [Department of Justice] matter."

Asked about the two men's relationship, McClellan said, "He was a supporter in the past. He was someone, I would point out, that certainly supported Republicans and Democrats in the past."

Bush has been aggressive about pursuing corporate wrongdoing, McClellan said. "The administration has been successfully working to restore confidence to the marketplace by rooting out corporate wrongdoing, to provide fair and accurate information to the investing public, to reward shareholder and employee trust and to protect jobs and savings of hardworking Americans."

Several former Enron executives, including former Chief Financial Officer Andrew Fastow, have pleaded guilty and agreed to cooperate with the government.

Fastow was sentenced to 10 years in prison. Former CEO Jeffrey Skilling pleaded not guilty this year to fraud, insider trading and lying about Enron's finances.

Lay, 62, guided Enron for years, shaping the once-obscure pipeline company into a world-leading energy trading concern.

The federal government has launched 30 separate prosecutions related to Enron's implosion, including a criminal case that felled auditor Arthur Andersen two years ago and criminal probes of about 20 former Enron employees. Of those, 11 have resulted in convictions or guilty pleas.

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