Wednesday, February 08, 2006
Attorneys for former Enron CEOs Jeffrey Skilling have put prosecution witness and former head of Enron's investor relations Mark Koenig through the ringer for the last three days, as the Houston Chronicle reports.
Defense attorneys have caught Koenig in error on more than one issue, although the importance of those errors or the underlying issues is unclear. For instance, Koenig asserted last week on the stand that Enron had met every earnings estimate from 1997-2000. In reality, Enron missed one estimate by one penny per share during that time period.
Defense attorneys are pursuing a strategy in which they claim Enron's catastrophic downfall was not caused by the massive accounting fraud, of which Lay and Skilling were not only aware, but which they also signed off on. Instead, they appear to be laying the groundwork for the theory that shortsellers (investors whose purchases predict and benefit from a stock's price decreasing) exacerbated the fraudulent behavior of a few lone rogues at Enron.
No big surprises yet. Stay tuned.