The verdict put the blame for the 2001 demise of the high-profile energy trader, once the nation's seventh-largest company, squarely on its top two executives. It came in the sixth day of deliberations following a federal criminal trial that lasted nearly four months.
Lay was also convicted of bank fraud and making false statements to banks in a separate, non-jury trial before U.S. District Judge Sim Lake related to Lay's personal finances.
The conspiracy conviction was a major win for the government, serving almost as a bookend to an era that has seen prosecutors win convictions against executives from WorldCom Inc. to Adelphia Communications Corp. and homemaking maven Martha Stewart. The public outrage over the string of corporate scandals led Congress to pass the Sarbanes-Oxley act, designed to make company executives more accountable.
Enron's collapse alone took with it more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.
"It's a huge victory for prosecutors, a watershed case for them, and a crushing blow for the two defendants, who right up until the end thought they might be able to convince jurors that the apple wasn't rotten to the core," CBS News legal analyst Andrew Cohen says.
"The jury's verdicts help to close a notorious chapter in the history of America's publicly traded companies" said Rep. Michael Oxley, R-Ohio, co-author of the Sarbanes-Oxley legislation. "Appeals aside, the end of the trial will mark the end of a dark era."
Enron founder Lay was convicted on all six counts against him in the corporate trial and all four in the personal banking trial. Former Chief Executive Skilling was convicted on 19 of the 28 counts in the corporate trial, including one count of insider trading, and acquitted on the remaining nine.
Lake set sentencing for Sept. 11. Lay's charges carry a maximum penalty in prison of 45 years for the corporate trial and 120 years in the personal banking trial. Skilling's charges carry a maximum penalty of 185 years in prison.
CBS News correspondent Lee Cowan reports the heart of the prosecution's case was the assertion that both Lay and Skilling lied to employees and investors about the health of Enron, and conspired to inflate earnings and hide losses through complex accounting tricks — so they could get rich off the stock.
"Prosecutors strung together their largely circumstantial case by telling jurors that the two men were simply too smart, too savvy and too involved in Enron to not know about the off-the-book partnerships that hid the company's massive losses from investors and regulators," Cohen said.
As Lake read the verdict from the bench, Lay tossed his head at hearing the first "guilty" on the conspiracy count. He clutched his wife's hand as he heard that word over and over again.
Lay sat with his wife, Linda; his daughter, Elizabeth Vittor, a member of his defense team; and Linda Lay's daughter, Robyn. As Lay clutched Linda Lay's hand, the three women leaned forward and began to sob quietly.
After Lake left the courtroom, Lay's family and some friends gathered around him as the ex-chairman, red-faced and fighting back tears, hugged them and thanked them for their support.
Skilling, sitting with his brother, Mark, showed no emotion when the verdict was read.
The sentencing will come five years almost to the day after Skilling sold 500,000 shares of Enron stock for $15.5 million, for which he was convicted of insider trading.
"Obviously, I'm disappointed," Skilling told reporters outside the courthouse. "But that's the way the system works."
"We're going to stand behind him," his lawyer, Daniel Petrocelli, said. "As I told him, we've just begun to fight."
Skilling's $5 million bond, which restricts him to the continental U.S., remains in effect. Lay, who surrendered his passport, posted a $5 million bond secured with family-owned properties at a hearing following the verdict.