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US authorities are probing if Linda, wife of ex-Enron chairman Ken Lay, acted improperly when she had their family foundation sell 1.3 million Enron stocks just days before the energy giant's bankruptcy.
Mike Ramsey, lawyer for Ken Lay, confirmed the Enron task force was probing Linda Lay's requests to the foundation to sell shares in order to use the money.
"It is a low and dirty blow," Ramsey said of the probe, insisting that Linda requested for the sale of 500,000 Enron shares to pay charitable obligations. Ramsey said the Lays have learned of the investigation "in circumstantial ways" and have not been confronted by federal authorities, the Houston Chronicle reported on Wednesday.
The New York Times first reported the investigation of the November 28, 2001 sale, which occurred the same morning when rumours circulated that a possible bailout of Enron had fallen through and that Enron's credit rating was being cut.
It was sold after the credit-rating agencies acted and before trading was halted, Ramsey said.
"It was sold the day of the downgrade, when the information was in the market." Ramsey said Enron opened around $4 a share that morning and the Lay family foundation sold around $2.62 a share.
"This was not to enrich anybody; this was to meet charitable obligations. In a free-falling market they did what they could."
The Lays' foundation, which once had assets of $52 mn, contributed to causes including Barbara Bush's literacy drive, Houston's Holocaust Museum, M.D. Anderson Cancer Centre, Rice University, the Museum of Fine Arts and First United Methodist Church.