Friday, April 28, 2006
All in the Family
Lay Says Son Was Among Enron Short Sellers He Blamed
That was the Bloomberg headline yesterday above a story describing how the man who built Enron and took full credit during the halcyon days of that company's rise to power blamed its fall on his own CFO and the dreaded short-sellers's cabal—and I am not making that up.
Former Enron Corp. Chairman Kenneth Lay acknowledged his son was among short sellers of company stock, a group of investors the executive blamed at his fraud trial for destroying the company. Lay was shown a March 2001 Charles Schwab Corp. statement that listed four trades by his son Mark, betting on a decrease in Enron's stock price. Lay agreed it showed his son, 37, a former Enron vice president, had been one of the short sellers he'd criticized as a group.
Mark Lay ran the paper products group, which was—according to friends of mine in the paper industry—a disaster from the day Enron overpaid for its first paper mill and set about changing the way the paper business operated. That initiative was so successful the man in charge shorted his own company’s stock. Meanwhile, Father Ken was letting go shares of Enron while telling Wall Street encouraging things about his company.
You could say short-selling was all in the Lay family.
From what I’ve seen, people seem genuinely surprised that Ken, often described as folksy and avuncular, lost his cool in the courtroom.
I have a suggestion: somebody should ask Lay’s first wife—the wife he left—how folksy and avuncular a guy who rose to the head of a multi-billion dollar enterprise could be.
Me, I think we’re seeing the real Ken Lay.
I Am Not Making This Up
© 2005 Jeff Matthews
The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations.
Posted by Jeff Matthews at 6:21 AM