Enron's Lay to Surrender Documents

He agrees with the SEC to comply with a subpoena hours before a scheduled hearing.
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Securities regulators got Kenneth Lay to cry uncle in a legal battle over some of the former

Enron

chairman's papers.

Lay agreed on Friday to turn over documents the

Securities and Exchange Commission

had been seeking under a court subpoena. Lay had resisted producing the papers, claiming that to do so would violate his constitutional right against self-incrimination.

But Lay agreed to surrender the documents just hours before the SEC and Lay's attorneys were set to appear before a federal judge in a hearing over the dispute. The agreement, signed by U.S. District Court Judge Royce C. Lamberth, permits the SEC to use the documents for any law enforcement action, even one against Lay.

An SEC spokesman said Lay is expected to comply with the subpoena request some time next week.

It's not clear what the SEC hopes to learn from the 1,000 pages of documents it seeking. Prior to his resignation from Enron, Lay did in fact turn over thousands of pages of documents to SEC investigators. Included in those were his personal calendars and bank statements.

To date, Lay and Jeffery Skilling, Enron's former chief executive, remain the two big fish at the bankrupt energy trading firm not to be charged with any crime in one of the nation's biggest corporate frauds.

But in recent weeks, there have been signs that prosecutors and regulators, who are working in tandem in the Enron case, are getting more aggressive as they slowly try to work their way up the corporate ladder.

In September, prosecutors charged three former

Merrill Lynch

(MER)

investment bankers with helping Enron manufacture a profit in late 1999 through the bogus purchase of energy equipment. And just days before that, former Enron Treasurer Ben Glisan was sentenced to five years in prison after admitting his role in cooking the company's books.

Last month David Delainey, the energy trader's former North American chief executive, pleaded guilty to a criminal fraud charge and settled allegations that he carried out illegal insider trading. Prosecutors also charged him with propping up Enron's earnings through a series of underhanded bookkeeping schemes.