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Aggressive prosecutors, however, believe that the practice of firms underwriting legal fees is a form of hush money. Former deputy attorney general Larry Thompson told me, “If you sit there and think these corporations are paying for the employees’ choice of lawyer, and not sometimes simply to keep the employees quiet, then you believe in the tooth fairy.”

“Collateral consequences” was, and remains, an ill-defined concept. How worried should the government be if a punishment causes the company to go out of business? Should regulators worry about the cashiering of innocent employees? What about customers, suppliers, or competitors? Should they fret about financial crises? From this rather innocuous mention, the little notion of collateral consequences would blossom into the great strangling vine that came to be known after the financial crisis of 2008 by its shorthand: “too big to jail.”

The company had countered the government with an argument that companies continued to make over the next century whenever they faced legal jeopardy: to “punish the corporation is in reality to punish the innocent stockholders, and to deprive them of their property without opportunity to be heard, consequently without due process of law.”

If one witness says something, don’t call a second to say the same. Don’t get bogged down in minutiae. If a case is overly complicated, it requires weeks of evidence and a parade of witnesses that alone create reasonable doubt in the minds of jurors.

Defense lawyers often contended that accountants couldn’t be held responsible for frauds. They could be duped as easily as anyone. Accountants were supposed to make sure that the books were consistent with the accounting principles.

The agency seemed incapable of getting an admission of guilt and unwilling to go to trial except in the easiest cases. By the 2000s, no-admit, no-deny settlements would be both habitual and toothless. Arthur Andersen entered into one but continued its lax practices.

Companies habitually entered into agreements with the SEC without being forced to admit anything. They were insignificant punishments, and they didn’t change the conduct. The prosecutors had realized: fines are just a cost of doing business.

Stock market plunges reveal fraud. When the tide goes out, you get to see who is swimming naked, as Warren Buffet said famously.

The next day, Lay told employees at a companywide meeting that Enron’s fundamentals were the “strongest they have ever been” and that liquidity was “strong.” Glisan testified that Fastow warned Lay that the company would need to be restructured or sold. Five days later, Lay told BusinessWeek magazine that the company was “probably in the strongest and best shape it’s ever been.”

Enron was not a volatile trading shop, Skilling had told the public. Ruemmler brought on Delainey to destroy that notion, and he did. He testified that Enron’s wholesale energy unit’s trading gains and losses swung wildly. The unit had lost $551 million in one day in late 2000, a sum that exceeded the unit’s entire profits from the previous year. Earlier that same month, it had made $485 million in a day.