Houston – Nine months before Enron Corp. flamed out in bankruptcy, some investors were questioning the strength of its businesses despite public assurances from company founder Ken Lay and former chief executive Jeff Skilling that all was well, jurors in their fraud and conspiracy trial learned Wednesday.
Those questions and a stock price that dropped to less than $60 per share from its high of $90 in August 2000 prompted Skilling to hold a conference call in March 2001 to reassure Wall Street that Enron was healthy.
“I have no idea why the stock is down,” Skilling told analysts who influenced the stock price. “I know this is a bad stock market, but Enron’s in good shape.”
The audiotape was played on former Enron investor-relations chief Mark Koenig’s fifth day on the witness stand.
Prosecutors have played clips of videos and audiotapes to bolster allegations that Skilling and Lay repeatedly lied about Enron’s financial health and hid bad news to inflate the company’s stock price.
But the defense teams wanted to play them in full to ensure that jurors heard the comments in context. U.S. District Judge Sim Lake acquiesced, on the condition that they be played only once in their entirety.
The defendants say there was no fraud at Enron and that negative publicity triggered a loss of market confidence.
Koenig pleaded guilty in August 2004 to aiding and abetting securities fraud for lying to investors about Enron’s finances. He is among 16 ex-Enron executives who have pleaded guilty to crimes and are cooperating with prosecutors.
Days before the March 2001 conference call, Enron announced that a video-on-demand partnership with Blockbuster Inc. was dead, a year after the company announced the deal with much fanfare as a venture that could bring in billions.
