New York Times – Prosecutors attempted this morning to pick apart the assertion of Kenneth L. Lay, Enron’s former chairman, that hedge funds were part of a “conspiracy” thatcaused Enron’s downfall in 2001, as the government’s cross-examination of Mr. Lay entered its second day at the federal courthouse here.
In an exchange that briefly flustered Mr. Lay, one of the prosecutors, John Hueston, asked him to respond to brokerage records that showed his son, Mark Lay, had engaged in the same investment strategies used by some hedge funds that were betting on the decline of Enron’s stock throughout 2001.
Mr. Hueston asked Mr. Lay if he would describe his son as a “vulture,” a term one of Mr. Lay’s lawyers has used in the trial to describe short-sellers, investors who essentially wagered on Enron’s fall after perceiving weaknesses in the finances of the company. Mr. Lay said, “I don’t think he’s a vulture, no.”
On the whole this morning, the 64-year-old Mr. Lay appeared a bit fatigued though somewhat calmer than on Wednesday, when he angrily sparred with Mr. Hueston after testifying about his use of millions of dollars of Enron credit lines to shore up his personal finances. Mr. Lay has repeatedly asserted that hedge funds and financial journalists, as well as a small number of deceptive Enron executives, were responsible for stirred-up hysteria in 2001 that produced Enron’s chaotic collapse.
