From collapse to convictions: a timeline
CBC News Online | Updated October 23, 2006
Enron began in 1985, when it started operations as an interstate pipeline company created from the merger of Houston Natural Gas and Omaha-based InterNorth. Kenneth Lay, the former chief executive officer of Houston Natural Gas, became CEO. A year later he was named chairman.
Former Enron CEO Jeff Skilling leaves the federal courthouse on Wednesday, April 26, 2006 in Houston. (AP Photo/Jessica Kourkounis)
By 1999, the company had moved into new fields, including Enron Online, the company's website for trading commodities. It soon became the largest business site in the world. About 90 per cent of Enron's income eventually came from trades over Enron Online.
The company enjoyed spectacular growth with annual revenue hitting $100 billion US in 2000, making it the seventh-largest company on the Fortune 500 and the sixth-largest energy company in the world. The company's stock price peaked at $90 US.
But by 2001, cracks began to appear. In August Jeffrey Skilling, a driving force in Enron's revamp and the company's CEO of six months, announced his departure, and Lay resumed the post of CEO. In October 2001, Enron reported a loss of $618 million - its first quarterly loss in four years.
Chief financial officer Andrew Fastow was replaced, and the U.S. Securities and Exchange Commission launched an investigation into investment partnerships led by Fastow. That investigation would later show that a complex web of partnerships was designed to hide Enron's debt. By late November, the company's stock was down to less than $1 US. Investors had lost billions.
Enron founder Ken Lay leaves the federal courthouse on Wednesday, April 19, 2006 in Houston. (AP Photo/Jessica Kourkounis)
On Dec. 2, 2001, Enron filed for bankruptcy protection in the biggest case of bankruptcy in the United States up to that point. (WorldCom's collapse would later steal that dubious honour.) Roughly 5,600 Enron employees subsequently lost their jobs.
The next month, the U.S. Justice Department opened its investigation of the company's dealings, and Ken Lay quit as chairman and CEO. Hundreds of charges would eventually be laid - and 19 former executives would either plead guilty or be convicted for their part in what would become known as one of the biggest frauds in American history.
Founder Ken Lay and former CEO Jeffrey Skilling were both convicted in May. But Lay died two months later, escaping what would surely have been a lengthy jail sentence. Skilling, on the other hand, was given more than 24 years. Andrew Fastow, Enron's former chief financial officer, was given a relatively light sentence of six years after he cooperated with prosecutors.
Oct. 23, 2006:Former Enron chief executive officer Jeffrey Skilling is sentenced to 24 years, four months in jail for his role in the collapse.
» CBC STORY:Enron's Skilling jailed for years
Oct. 17, 2006: A U.S. judge throws out the criminal convictions of Kenneth Lay because he died before he could appeal his case.
» CBC STORY: :Judge vacates criminal convictions of Enron's Ken Lay
Sept. 26, 2006: Andrew Fastow, Enron's former chief financial officer, is sentenced to six years in prison. He could have been given up to 10 years, but the judge notes his guilty plea and his co-operation with authorities, saying "These factors call for mercy."
» CBC STORY: Ex-Enron executive Fastow gets 6-year sentence
July 5, 2006: Ken Lay, 64, dies of a heart attack at a family home in Aspen, Colo.
» CBC STORY: Disgraced Enron founder Lay dead
May 25, 2006: In the sixth day of deliberations, a jury finds Enron founder Kenneth Lay guilty of all six counts against him, including conspiracy to commit securities and wire fraud. As well, former Enron chief executive Jeffrey Skilling is convicted of one count of conspiracy, 17 counts of fraud and making false statements and one count of insider trading.
Lay and Skilling had blamed the collapse of what was once the seventh-largest company in the United States on bad publicity and lost market confidence. Prosecutors had a different theory: they accused the two men of repeatedly lying to investors and employees about Enron's financial health and of running an elaborate fraud that gave the company the illusion of success as it was hurtling toward bankruptcy.
Both men face lengthy prison sentences – but are expected to appeal. A total of 19 former Enron executives have either pleaded guilty or been convicted for their part in the company's failure.
» CBC STORY: Enron's Lay found guilty on all counts, Skilling on 19
April 10, 2006: Former Enron chief executive Jeffrey Skilling testifies in his own defence on 28 charges relating to the company's bankruptcy, telling a Houston court that he is "absolutely innocent" and he would "fight these charges until the day I die."
» CBC STORY: 'Absolutely innocent,' ex-CEO tells Enron trial
March 28, 2006: The prosecution rests in the trial of Enron Corp. founder Ken Lay and former chief executive officer Jeffrey Skilling. Three charges against Skilling and one charge against Lay are dropped after the prosecution doesn't present evidence to support them. Skilling still faces 28 counts of conspiracy, fraud and insider trading. Lay faces six counts of conspiracy and fraud.
» CBC STORY: Prosecution rests in Enron trial as some charges dropped against Skilling, Lay
Jan. 30, 2006: Jury selection in the trial of Enron Corp. founder Ken Lay and former CEO Jeffrey Skilling begins in Houston. The trial is expected to last about four months.
» CBC STORY: Jury selection underway for trial of former Enron bosses
Dec. 28, 2005: Richard Causey, former chief accountant at Enron Corp., pleads guilty to a single count of securities fraud as part of a deal with prosecutors. Causey originally pleaded not guilty to 34 counts in early 2004. The other charges were dropped, and Causey will be sentenced to seven years in prison.
» CBC STORY: Enron exec pleads guilty to securities fraud
July 15, 2005: Enron agrees to a $1.5-billion US settlement to end claims that it manipulated the electricity market during the California energy crisis of 2000 and 2001.
» CBC STORY: Enron settles California price-gouging claim
July 15, 2005:Enron agrees to a $1.5 billion US settlement to end claims that it manipulated the electricity market during the California energy crisis of 2000 and 2001.
May 31, 2005:The U.S. Supreme Court unanimously overturns the 2002 conviction of Arthur Andersen for destroying documents in the Enron case. The decision says instructions to the jury were too broad.
» CBC STORY: Arthur Andersen's Enron conviction overturned
July 15, 2004: A New York judge gives his approval for Enron's plan to emerge from bankruptcy protection, which will see the company pay $12 billion US of the $63 billion US it owes to about 20,000 creditors.
» CBC STORY: Enron approved to emerge from bankruptcy protection
July 7, 2004: Former Enron founder and CEO Kenneth Lay turns himself in to the Houston office of the Federal Bureau of Investigation. He is led in handcuffs to a courthouse, where he is charged with 11 criminal charges, including securities and wire fraud, and making false statements. He pleads not guilty to all of them. The U.S. Securities and Exchange Commission also files civil charges of insider trading against Lay.
» CBC STORY: Enron's Kenneth Lay pleads not guilty on 11 counts
May 6, 2004: Lea Fastow, Enron's former assistant treasurer and wife of former CFO Andrew Fastow, agrees to a plea agreement and a one-year prison term. She pleads guilty to filing false tax forms.
» CBC STORY: Lea Fastow pleads guilty to tax charge, gets 12-month sentence
Feb. 19, 2004: Former Enron CEO Jeffrey Skilling pleads not guilty to 40 federal charges, from insider trading to making false statements to auditors. He posts a $5-million bond.
» CBC STORY: Former Enron chief faces 40 federal charges
Jan. 14, 2004: Former Enron CFO Andrew Fastow agrees to a plea agreement and a 10-year prison sentence. He pleads guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud. He also agrees to co-operate with federal prosecutors. His wife, Lea Fastow, also pleads guilty, but would later withdraw the plea.
» CBC STORY: Andrew Fastow agrees to plea deal; will cooperate in Enron case
Sept. 10, 2003: Ben Glisan, a former Enron treasurer, pleads guilty to a charge of conspiracy. He is sentenced to five years in prison, making him the first former Enron executive to go to jail.
» CBC STORY: First Enron executive goes to prison
July 11, 2003: Enron unveils a bankruptcy restructuring plan that would see most of Enron's 20,000 creditors receive about 20 per cent of the $63 billion US they are owed.
» CBC STORY: Enron unveils restructuring plan
May 1, 2003: Lea Fastow, Enron's former assistant treasurer and wife of former CFO Andrew Fastow, is charged with conspiracy and filing false tax forms for her role in some of her husband's deals to hide Enron's debt.
Oct. 16, 2002: Accountancy firm Arthur Andersen is given the maximum sentence for obstruction of justice after shredding Enron documents: five years' probation and a $500,000 fine.
» CBC STORY: Arthur Andersen fined, given probation over Enron scandal
Oct. 2, 2002: Former Enron CFO Andrew Fastow is arrested on charges of fraud and money laundering. He would eventually face 98 charges.
» CBC STORY: Former Enron CFO charged with fraud, money laundering
Aug. 21, 2002: Former Enron executive Michael Kopper pleads guilty to money laundering conspiracy and conspiracy to commit wire fraud. He becomes the first former Enron executive to plead guilty to criminal charges. Kopper agrees to co-operate with federal investigators.
» CBC STORY: Michael Kopper becomes first ex-Enron exec to plead guilty
March 14, 2002: Arthur Andersen is charged with obstruction of justice for destroying paper and computer documents related to Enron as the SEC investigation started.
» CBC STORY: Arthur Andersen charged with obstruction in Enron case
Feb. 12, 2002: Former CEO Lay declines to testify before Congress, citing his Fifth Amendment right against self-incrimination.
» CBC STORY: Enron's Lay refuses to testify
Feb. 7, 2002: Former Enron CEO Jeffrey Skilling denies any knowledge of financial or accounting irregularities. At the same hearing before Congress, four Enron executives, including former CFO Andrew Fastow, invoke their Fifth Amendment right against self-incrimination and decline to testify.
» CBC STORY: Former Enron CEO says was 'not aware' of financial irregularities
Feb. 5, 2002: The U.S. Senate Commerce Committee subpoenas former Enron CEO Ken Lay.
» CBC STORY: U.S. Senators subpoena Enron's Lay
Feb. 4, 2002: Ken Lay resigns from Enron's board of directors.
» CBC STORY: Lay resigns from Enron board ahead of subpoena
Jan. 25, 2002: John Clifford Baxter, former Enron vice-president, is found dead in his car. He was shot once in the head, and authorities treat his death as a suicide. Baxter resigned as vice-president in May 2001.
» CBC STORY: Former Enron executive found dead
Jan. 24, 2002: David Duncan, a former Arthur Andersen auditor who handled the Enron bankruptcy, invokes his Fifth Amendment right not to incriminate himself and refuses to testify before Congress.
» CBC STORY: Fired auditor refuses to answer Enron questions
Jan. 10, 2002: Arthur Andersen says its employees destroyed a "significant but undetermined" number of Enron documents.
» CBC STORY: Enron documents destroyed: auditor
January 2002: The U.S. Justice Department begins its investigation of Enron. Lay resigns as chairman and chief executive.
Dec. 2, 2001: Enron files for bankruptcy protection, the largest bankruptcy in U.S. history at the time. (The dubious title would later go to WorldCom in July 2002.) Thousands of workers would be laid off.
» CBC STORY: Enron files for Chapter 11; lawsuits loom
November 2001: Enron announces it had overstated its earnings back to 1997 by about $600 million. Its shares plunge to "junk" status by the end of the month. The SEC adds accountancy firm Arthur Andersen, the auditor for Enron, to its investigation.
» CBC STORY: Enron shares plunge; Dynegy abandons takeover
October 2001: Enron reports its first quarterly loss in four years, $618 million US, and a reduction in shareholder equity of over $1 billion. CFO Andrew Fastow is replaced. The Securities and Exchange Commission begins an investigation related to investment partnerships led by Fastow. Their investigation would later show that the complex web of partnerships was designed to hide Enron's debt.
August 2000: Enron's shares hit an all-time high of more than $90 US. Annual revenues reach $100 billion US. It is ranked the sixth-largest energy company in the world.
1999: Enron launches its broadband services unit and Enron Online, the company's website for trading commodities, which soon becomes the largest business site in the world. About 90 per cent of its income would eventually come from trades over Enron Online.
1990-1998: Enron expands its holdings in the U.K., Europe, South America and India. It moves away from natural gas and pipeline operations to marketing in other energy-related commodities.
1989: Enron opens its Gas Bank, where consumers can buy long-term supplies of natural gas at a fixed price, even as the real price fluctuates.
1988: Enron opens offices in the U.K. after the country's privatizes its power industry.
1986: Kenneth Lay, former CEO of Houston Natural Gas, becomes chairman and chief executive of Enron.
1985: Interstate pipeline company Enron is formed by the merging of Houston Natural Gas and Omaha-based InterNorth.