70 Million Pieces

Watching federal prosecutor John Hueston cross-examine Enron founder Kenneth Lay on his stock sales during 2001 reminds me of a quote from "Chariots of Fire," when the running coach tells the runner what he's about to take on: "I'll tear you apart, piece by bloody piece."

Hueston is doing a number on Lay on his stock sales. During 2001, Lay sold $70 million in Enron stock, sales he said he was "forced" to do to meet margin calls on investments. He said he did everything he could to NOT sell Enron stock because he believed in the company. Hueston, who believes Lay dumped the Enron stock because he knew the company was doomed while lying to investors that the company was in good shape, is doing his best to disassemble that defense at a granular level.

Hueston has shown that Lay had multi-million-dollar lines of credit, $30 million in real estate holdings, a stake in a private equity company and portfolios of non-Enron stock that he could have sold to meet the margin calls, which Hueston pegged at $200,000. Later, Hueston produced a $500,000 margin call -- all well short of the $70 million figure.

In response, Lay has been stammering, and -- just before lunch -- he dropped his pugnacious manner and offered only quiet, short answers to Hueston.

By Frank Ahrens |  May 1, 2006; 3:02 PM ET  | Category:  Dispatches
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