SEC calls Lay fight over Enron subpoena

WASHINGTON -- The U.S. Securities and Exchange Commission recently said an attempt by ex-Enron Corp. Chairman Kenneth Lay to withhold records subpoenaed by the agency is a "charade" because he has already given them to a bankruptcy examiner. The former chairman of the bankrupt energy trader has been ordered to appear in federal court in Washington on Nov. 7, following SEC charges he had not fully complied with the commission's subpoena request.

Lawyers for Lay have said he has already produced more than 23,000 pages of documents for the SEC's investigation of the Houston-based company, which collapsed in 2001 amid an accounting scandal.

In September, the SEC said it was looking at whether Lay knew of, or was involved in, fraudulent activity at Enron. Lay has argued the 870 pages of documents he has withheld were personal rather than corporate in nature.

He said he wanted to invoke his Constitutional Fifth Amendment right against self-incrimination because the SEC would not guarantee the information would not be later used against him.

But in an amended court response filed recently, Lay disclosed he had made the documents available to Enron's bankruptcy examiner, prompting a sharp SEC response.

"Lay certainly cannot have any bonafide legal concerns attaching to his physical act of producing subpoenaed records given the fact that he has now produced them to third parties," including class action lawsuit plaintiffs and the bankruptcy examiner, the SEC said in its court documents, which it filed and released recently.

The SEC said in its response that Lay has entered into a "confidentiality agreement" with the bankruptcy examiner that protected the documents from disclosure.

"This court should not permit Lay to continue this charade," the SEC said, adding: "Lay has demonstrated a frankly whimsical approached to asserting his Fifth Amendment rights."

Reuters