Jeffrey Skilling

Skilling agreed to a 168-month sentence in exchange for waiving further appeals and permitting the distribution of approximately $42 million in seized funds to victims. In 2015, the SEC obtained a final civil judgment and a permanent ban on serving as an officer or director of a listed company.

State of the evidence

Documented

Attribution

Accused

The Fifth Circuit upheld the convictions but vacated the sentence. In 2010, the Supreme Court ruled that the honest-services fraud theory did not cover conduct without bribes or kickbacks; in 2011, the Fifth Circuit nevertheless found that the error had not affected the verdict and upheld the convictions.

A federal jury convicted Skilling of one conspiracy count, twelve securities fraud counts, five counts of false statements to auditors and one insider trading count.

State of the evidence

Established by a court

Attribution

Accused

The court initially sentenced Skilling to 24 years and four months in prison and approximately $45 million in restitution.

Attribution

Accused

Federal authorities brought criminal charges and the SEC filed a civil action detailing the Enron fraud scheme, misleading statements, share sales and lies to auditors.

Legal status — source text

criminal_indictment_and_SEC_civil_action

Attribution

Accused

Skilling and other executives used reserves in the trading business to conceal earnings volatility and release amounts when needed to meet earnings targets.

State of the evidence

SEC_allegations_later_supported_by_criminal_convictions

Attribution

Direct responsibility

The SEC described the transfer and presentation of earnings intended to conceal substantial Enron Energy Services losses within more profitable segments.

State of the evidence

Allegations

Attribution

Direct responsibility

The SEC accused Skilling, Causey, Fastow and others of using the LJM partnerships and Raptor vehicles as supposedly independent third parties to avoid recognising losses and artificially improve the accounts.

State of the evidence

SEC_allegations_later_supported_by_convictions

Attribution

Direct responsibility

The SEC alleged that assets in the merchant investment portfolio were overvalued to generate earnings and avoid recognising losses.

State of the evidence

Alleged

Attribution

Direct responsibility

The SEC complaint describes structured transactions with major banks that prosecutors considered disguised loans, presented as energy trades to improve the appearance of debt and cash flows.

State of the evidence

Alleged

Attribution

Direct responsibility

At an analysts' conference, Skilling described EBS and EES, among other things, as strong and sustainable franchises and suggested a value of $126 per share, while the SEC described major internal difficulties.

State of the evidence

Alleged

Attribution

Personally implicated

Skilling signed several letters to the auditor asserting, among other things, that the financial statements were fairly presented and that commitments, guarantees and related-party transactions were properly recorded and disclosed.

Attribution

Directly implicated

The SEC estimated proceeds of approximately $63 million from sales made while Skilling allegedly possessed material non-public information; the criminal case resulted in a conviction on one insider trading count.

State of the evidence

SEC_alleged_about_63m_unlawful_proceeds_and_jury_convicted_one_insider_trading_count

Attribution

Directly implicated

According to the SEC, Skilling and others presented a network and proprietary software as operational when they were not functional to the extent claimed, while valuing EBS at tens of billions of dollars.

State of the evidence

Alleged

Attribution

Personally implicated

The SEC maintained that after promoting EBS, executives structured a mechanism allowing Enron to recognise approximately $85 million in earnings from the appreciation of its share price.

State of the evidence

Alleged

Attribution

Direct responsibility