Former Enron CEO Jeffrey Skilling was charged with fraud and inside trading Thursday for his alleged role in the Enron scandal that nearly destroyed the energy company and lost billions for shareholders and employees.
The 50-year-old Skilling, who appeared before a magistrate in Houston, pleaded innocent to all 35 charges against him. The judge revoked his passport and released him on $5 million bail.
Skilling is the highest-ranking former Enron executive to face charges in the two-year investigation by the Justice DepartmenT. So far, 29 Enron and Wall Street figures have been charged or pleaded guilty in one of the most infamous corporate crime cases.
In January, former chief financial officer Andrew Fastow pleaded guilty to fraud and agreed to help prosecutors. Justice and the Securities and Exchange Commission have investigated former chairman Kenneth Lay, but he has not been charged. His attorneys have said he did nothing wrong.
“The government continues its march up the corporate ladder,” said Mark Biros, a defense attorney at Proskauer Rose. “For people at the top, the march is rarely a good thing.”
The criminal charges against Skilling consist of securities and wire fraud, trading on inside information, conspiracy and making false statements to auditors. The charges were added to a January indictment against Richard Causey, Enron’s former chief accounting officer, that accused him of fraud and conspiracy. If convicted on all counts, Skilling and Causey could face the rest of their lives in prison and hundreds of millions of dollars in fines.
According to the indictment and parallel civil charges filed by the SEC, Skilling, Causey, Fastow and others engaged in a vast scheme from 1999 to 2001 to hide Enron’s financial losses to enrich themselves and mislead investors. Skilling allegedly used inside information to gain $63 million from Enron stock sales in 2000 and 2001.