Former Enron CEO Lay Surrenders in Houston

Lay Enters Not Guilty Plea to All Charges

Former Enron Corp. chief executive Kenneth L. Lay pleaded not guilty today after being charged with 11 counts of securities fraud, wire fraud, and false and misleading statements in a 65 page indictment unsealed this morning.

He was released on a $500,000 bond by U.S. Magistrate Judge Mary Milloy.

Prosecutors accused Lay of taking over the helm of a massive conspiracy to hide Enron's rapidly deteriorating finances after August 2001. He served as the "principal spokesman" to investors, employees, and credit rating agencies -- and lied to all of them about the health of Enron's balance sheet, the indictment said.

For instance, in September 2001, Lay told employees in an Internet forum that the stock was an "incredible bargain." But prosecutors say that in the months prior Lay had bought $4 million in Enron shares while selling $24 million.

Lay reaped profits of $217 million through sales of Enron stock between 1998 and 2001, the indictment said. Over that period, he also collected $19 million in salary and bonuses. The government is seeking to seize Lay's 33rd floor penthouse apartment in the Huntingdon, a luxury complex near downtown Houston.

Also today, the Securities and Exchange Commission filed civil charges against Lay and said it was hoping to recover more than $90 million in what it called illegal proceeds from stock sales.

At a news conference shortly after his court appearance, Lay said he was saddened by the "enormous and irreversible hardships for thousands" that was caused by Enron's bankruptcy and he said that as chairman he took responsibility for the company's collapse. But he quickly added "that does not mean I know everything that went on at Enron."

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

He argued that he had suffered financially from the collapse, also, and that he had used big portions of his private wealth, rather than company stock, to cover his expenses as the company was deteriorating.

Lay said he wants "a speedy trial. I hope it will begin by September of this year."