Lay to Face Bank Fraud Charge
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Enron, that byword for corporate misdemeanours is still hanging like a millstone around the neck of Ken Lay, its Chairman. Not only is Mr Lay to stand trial over the collapse of the Enron empire with his fellow ex-directors, he is facing a court date over bank fraud charges. The collapse of Enron and WorldCom was the trigger for the Sarbanes-Oxley legislation. Whilst the amounts are small for the alleged bank fraud in comparison to the overall Enron debacle they pack a punch. Namely an extra 120 years to any prison stretch. A fine of $4m is also possible. Essentially the case against Mr Lay is that he borrowed money to buy stock on margin. However he had made personal promises to the banks that did not involve these purchases. Mr Lay is one of 900 suspects to have been criminally charged by the Justice Department for some kind of corporate malfeasance in the last two years. The main hammer brought to bear has been Sarbanes-Oxley. Whilst many would agree that clearer, more transparent financial reporting is a good thing, not everyone is sold the Act.
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