Trial, Day 2: Witness for the prosecution

In the first day of testimony in the Ken Lay/Jeff Skilling trial, Enron's former head of investor relations said the company's earnings were often adjusted to keep stock prices up. Mark Koenig, who worked closely with former executives Lay and Skilling, said both men were involved in financial management and that Skilling, the ex-CEO, authorized the financial deception.

In January 2000, the company upped its quarterly earnings on the eve of reporting by one penny — from 30 cents a share. Koenig said this was done after Enron heard analysts had increased their expectations. He believed it was "wrong" to change it, but the stock price might have fallen, the longtime Enron employee explained.

He described meeting Lay the next day and the chairman matter-of-factly joking about going to bed at one earnings rate and waking up to learn on the TV that the company had reported a higher rate.

Koenig, who pleaded guilty in 2004 to aiding and abetting securities fraud, said he and Skilling also lied about the well-being of Enron Broadband Services, a division of Enron, so the stock prices would stay up and the company would keep growing even though its core businesses were losing money. Koenig also talked about Lay wanting to keep John Olson, a Merrill Lynch analyst, away from Enron meetings because he asked tough questions. Olson was later fired from Merrill Lynch and said Lay pressured his bosses to can him because he was skeptical of Enron's performance.

A day of testimony about Enron's inner workings and finances — and persistent objections from defense lawyers — seemed to take their toll on Judge Sim Lake and the jury, leading Lake to end the day's proceedings early. Koenig's testimony will resume today.