“Glad you fellows could make it,” the former chairman of Enron told reporters as he surrendered to the FBI yesterday. It was the opening line of a judicial process that will seem at times impossibly opaque. But Kenneth Lay’s trial will also lay bare a spectacularly fraudulent approach to business and serve as a morality play of global significance.

Mr Lay transformed Enron from a pedestrian Texan gas pipeline company into the 600lb gorilla of the world’s energy markets. In recognising that energy in its myriad forms could and should be traded like shares or pork bellies, he was a pioneer: this insight attracted billions of dollars of much-needed investment in outdated American utilities that were prompted to compete with each other. The market rewarded Mr Lay with a vast personal fortune and a business empire stretching from Houston to India and beyond.

American prosecutors have spent the past three years examining Mr Lay’s activities at Enron, though not his commercial conquests. In 2001 he resumed duties as chief executive after the abrupt resignation of Jeffrey Skilling, a pin-up boy of the “new era” economy. In the previous five years, Mr Skilling had orchestrated a dizzying upward spiral of supposed earnings. When reality intervened, Mr Lay was left at the helm as a $60 billion company went bankrupt within a year. The full extent of the implosion and of the corruption was hidden until the end by a brilliantly constructed network of shell companies, complex derivatives and non-sensical management speak.

Executives deflected questions about Enron’s mounting debts with baffling references to “timeshifting consumption”. One annual report said the firm built “wholesale businesses through the creation of networks involving selective asset ownership, contractual access to third-party assets and market-making activities”. In truth it promised soaring profits from trading energy rather than producing it; why be just another company when you could be “the ” market?

With hindsight it is clear that Enron behaved like a tightrope walker with no pole. It promised the inflated returns to which Wall Street had grown accustomed during the mid-to-late 1990s, when dot-com duds were priced ever higher on the basis of ludicrous forecasts and their founders’ bad haircuts. Enron claimed exemption from the rules of the “old economy”, and its executives expressed heartfelt sympathy for companies which did not “get” the new business model. Unlike those start-ups, Enron was dealing in energy, a commodity for which demand was not exploding and whose production was static. Only increasingly desperate fiddling could create the appearance of exponential growth.

Witnesses at Mr Lay’s trial will insist he knew much more about the fiddling than this strangely diffident man has so far acknowledged. Prosecutors will focus especially on an internal memo leaked two years ago that stated “all transactions were reviewed with the office of the chairman”. But the trial, more broadly, will tell a story of sophisticated people falling prey to simple temptations, and hoodwinking the world’s financial markets in the process.

Some doubted Mr Lay would ever be indicted. That he has been vindicates the real workings of the market, which eventually priced this emblem of excess out of existence. Enron’s crimes against good sense and ordinary shareholders and its own employees were committed as the US lectured Russia and much of Asia on good corporate governance. Good governance means accountability and Ken Lay is about to discover the precise meaning of that word.

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