The first criminal trial involving former executives of the now infamous energy company, Enron, begins today in a case that could have a crucial bearing on future trials of the company’s top officials.
None of the six defendants – four former Merrill Lynch executives and two former mid-level Enron executives who are charged with conspiracy and fraud – have the notoriety of Enron’s founder, Kenneth Lay, or former chief executive, Jeffrey Skilling.
Nonetheless, the case starting today in Houston will be closely watched as a possible harbinger for when Mr Lay and Mr Skilling themselves appear in the dock. At issue in the so-called Nigerian barge trial, as jury selection begins, is whether Enron’s financial machinations – the kind that led to its eventual collapse – went beyond the law.
Enron’s bankruptcy in 2001 was the first of several high-profile scandals that sent tremors through Wall Street and the US corporate world and its impact is still being felt.
“It’s significant because this calls into question Wall Street practices in dealing with corporate America,” Philip Hilder, a former federal prosecutor who represents several Enron-related clients in Houston, told the Associated Press. “The ramifications of this are broader than Enron, certainly.”
Prosecutors accuse the six of helping push through a sale of several floating power plants stationed along the Nigerian coast to the brokerage Merrill Lynch in late 1999 that allowed Enron to report about $12m (£6.7m) in pre-tax earnings. All six have pleaded innocent.