Enron's former chairman Mr Kenneth Lay sold shares worth $16.3 million (€18.6 million) last August in the three weeks after he was warned by an employee that the company was in danger of "imploding in a wave of accounting scandals". While selling the Enron stock, Mr Lay assured workers of the company's viability.
New evidence of $70 million in previously unknown sales of Enron stock between February and October last year by Mr Lay pushes his total for the year up to $100 million.
Mr Lay, who last week exercised his Fifth Amendment rights before Congress with a plea that should not be seen as an admission of culpability, only filed the full report of his share transactions on Friday with the Securities and Exchange Commission (SEC) because of a special rule giving officers and directors who sell back stock from share options more than a year to disclose them. Normal trades must be disclosed within 10 days.
The bulk of the proceeds of the sales was used to pay back Enron for loans Mr Lay had taken out.
Nevertheless, his spokeswoman, Ms Kelly Kinberley, said: "Mr Lay remained confident in Enron stock through late 2001."
Ms Kinberley noted that he was entitled to borrow money from Enron under an agreement, "and he exercised that benefit". She added that Mr Lay and his wife did not expect to have to file for bankruptcy. "While they are experiencing liquidity problems, they believe they will be able to work through them," she said.
And yet, on August 21st, the day he sold $4 million of stock to the company, Mr Lay told employees that one of his highest priorities was to restore investor confidence, adding that that "should result in a significantly higher stock price".
On September 26th, in an online chat with employees, Mr Lay said the stock was a good buy and that he had bought some within the last two months. The latter was strictly true, but the new figures make clear that he had sold far more than he had bought.
It is not known how much money Mr Lay made from the sales. His SEC filings show that he and a Lay family partnership exercised options in 2001 for 635,334 shares, paying $12.2 million. That would reduce his net profits to $87.8 million on his sales last year, less whatever the other shares had cost him.
According to Enron reports, Mr. Lay made annual profits from exercising options of $13.1 million in 1998; $43.8 million in 1999; and $123.3 million in 2000. His salary and bonus from 1998 to last year was $22.5 million.
Enron has since disclosed that its profits were overstated in all of those years.
Nearly everything Mr Lay and his wife own is now up for sale, family members told the New York Times, including residential properties in Texas and Colorado, worth about $30 million.
