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Ken Lay

Ken Lay was an American businessman, and controversial founder and chief executive officer of energy giant, Enron Corporation. In a spectacular fall from grace, he would be convicted of presiding over one of the most sprawling business frauds in U.S. history.


Biographical fast facts

Full or original name at birth: Kenneth Lee Lay

Date, time and place of birth: April 15, 1942, at 6:00 p.m.*, Tyrone, Missouri, U.S.A.

Date, time, place and cause of death: July 5, 2006, at 3:11 a.m., Aspen Valley Hospital, Aspen, Colorado, U.S.A. (Heart attack)

Marriage #1
Wife: Judith Diane Ayers (m. June 10, 1966 - 1982) (divorced)

Marriage #2
Wife: Linda Ann Herrold (Phillips) (m. July 10, 1982 - July 5, 2006) (his death)

Children
Son: Mark Kenneth Lay (b. 1968)
Stepsons: Robert Ray Herrold (a.k.a. Beau Herrold), and Todd David Herrold

Daughter: Elizabeth Ayers Lay (b. 1971)
Stepdaughter: Robyn Anne Herrold

Parents
Father: Omer Lay (a feed store owner, farm equipment salesman and Baptist minister)
Mother: Ruth (Reese) Lay

Remains: Cremated


Birth data source
* Source: birth certificate

Career

Kenneth Lay began his career at Exxon Corporation predecessor Humble Oil & Refining as an economist (1965-68). He then served in the U.S. Navy beginning in 1968, working in navy procurement in Washington. In 1971, Ken was appointed to the Federal Power Commission as a federal energy regulator. He was next appointed deputy undersecretary of energy at the Interior Department (1972-74), served as vice president of Florida Gas Company (1974-76), president of Florida Gas Company (1976-79), executive vice president of The Continental Group (1979-81), President and chief operating officer of Transco Energy (1981-84), and president and chief operating officer of Houston Natural Gas Corporation (1984-85). In 1985, HNG merged with InterNorth to form Enron, and Kenneth L. Lay became chairman and CEO of the combined company the next year. He served in those roles from 1986 till 2002. Additionally, he served on the Board of Directors of Eli Lilly and Company, Compaq Computer Corporation, and Trust Company of the West. Lay was a Phi Beta Kappa graduate in economics from the University of Missouri, where in 1965, he also received a master's degree in economics. In 1970, he earned his Ph.D. in economics from the University of Houston.

Over the course of Kenneth Lay's 15 years at the helm of Enron, Fortune 500 would rank the company as high as seventh amongst the nation's largest companies, with claimed annual revenues of $101 billion. The only problem was, much of Enron's success turned out to have involved a series of elaborate scams. Various accounting tricks, phony deals, and numerous dummy corporations were utilized to give the appearance of a growing, thriving, wildly-profitable company. The scams were successful and brought scores of investors plunking their life savings down to get just a tiny piece of the phenomenal profits flooding Enron's coffers. In actuality, the company was deeply in debt, and on December 2nd, 2001, Enron declared bankruptcy.

One of the many scams involved an attempt to make profits look larger than they actually were by creating trades with dummy corporations, keeping all profits for Enron, while hiding loses in the phony corporations. Thus the true indebtedness of the company would be completely hidden from investors. Enron's numerous dummy companies had been trading natural gas and electricity among themselves, with each trade increasing the price, until the commodities were then sold to customers for several times their actual market value. The practice was responsible for bankrupting businesses and households, while Enron reported staggering earnings of $101 billion for the year.

In October of 2001, Enron admitted it was "missing" $1.2 billion. By the end, the once-mighty energy conglomerate had become a financial labyrinth which hid massive liabilities, while allowing those in power to enrich themselves with millions of dollars. Lay was accused of lying to his employees, investors and Wall Street about the company's health, and was charged with numerous counts of bank fraud, wire fraud, securities fraud, and conspiracy to commit securities and wire fraud. Subsequent investigations revealed a conspiracy to prop up Enron's stock price and conceal billions of dollars in debt using sophisticated phony business partnerships. The investigations resulted in guilty pleas or convictions of more than two dozen people, including some of the top executives at Enron. In 2006, Ken Lay was found guilty of conspiracy, securities fraud, wire fraud, and bank fraud.

Enron's demise wiped out billions of investor dollars, and cost the jobs and pensions of thousands of employees. Thousands also lost their retirement savings as the company filed for bankruptcy. Both the name Enron, and Ken Lay's name, have become synonymous with, and shorthand for, corporate corruption and accounting fraud. Most damning for Ken Lay was the fact that he had actually been apprised of some of the irregularities and potential corporate malfeasance, yet he was encouraging his own employees to buy more stock, telling them the company would rebound, while during the same period, he had been rapidly liquidating millions of dollars of his own personal Enron stock.

Even after his crimes had been made public, many of those in Houston, Texas, chose to focus on his previous philanthropic efforts. This was somewhat understandable in light of the fact he had poured millions into civic and philanthropic projects throughout the city before his downfall.

Expected to be sentenced to between 20 and 30 years in jail, the 64-year-old disgraced founder of Enron faced the prospect of spending the rest of his life in prison, and was due to be sentenced on October 23rd, 2006. He died unexpectedly of a heart attack, July 5th, 2006.

State Senator Joe Dunn (D-Santa Ana), who headed a special committee that investigated the charges of market manipulation, commented: "We cannot allow his death to rehabilitate his image, this is a man who is responsible for damaging millions of lives."


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