Wakeham to learn fate over Enron

Published on Sunday 28 May 2006 00:24

LORD Wakeham, the former Conservative energy minister and Enron non-executive director, will find out within weeks whether he is to face charges from the US Securities and Exchange Commission (SEC) for failing to prevent the energy trader's management manipulating its accounts.

The SEC charged former Enron chairman Kenneth Lay and former chief executive Jeff Skilling with fraud and insider trading in July 2004. But the SEC has held back from ruling on the firm's non- executive directors until the criminal prosecution of Lay and Skilling was completed.

After Thursday's ruling, they are now expected to release the findings of more than four years of investigations into the role played by the company's non-executives. Chris Dickson, executive counsel at the Joint Disciplinary Scheme, the UK accountancy watchdog, said he expected the SEC to move within a month.

A senior member of the SEC's Enron task force said: "Sometimes, when there's a proceeding in a criminal court, we may hold back on other investigations."

The JDS is waiting for the results of the SEC's investigation into Enron's non-executive directors to complete its own investigation into Wakeham, who is also a chartered accountant.

Should Wakeham be found to have failed to uphold the standards of a chartered accountant, the JDS could strip him of the right to practise.

The JDS is highly reliant on information collected by other agencies to make its judgments. Though Dickson says he has already received significant amounts of information drawn from the SEC's investigation into Enron's non-executives, he says the JDS will not rule till the SEC has made its ruling and all its evidence is available.

The SEC has the power to impose financial penalties and can also ban individuals from the right to sit on the boards of public companies.

Back in 2002, Enron's non-executive directors were criticised by the US Senate enquiry, which concluded the Enron board "knowingly allowed Enron to engage in high-risk accounting practices".