Enron's Skilling says never falsified earnings

Skilling's testimony on his second day on the witness stand contradicted statements made by former Enron executives who testified earlier in the trial the company had manufactured profits with Skilling's consent.

"Did you ever have a single conversation where you sat down with anyone at Enron where you said in so many words, 'Look we're not cutting it, we need to break the law?'" Skilling's lawyer Dan Petrocelli asked.

"No, I never did that," Skilling answered.

Skilling, 52, and former Enron CEO and Chairman Kenneth Lay, 63, are being tried in federal court on charges they lied to analysts and investors about the financial disarray at the company that was once the seventh largest in the United States.

Enron's December 2001 collapse into the then-largest ever U.S. bankruptcy was the first in series of corporate scandals that rocked the financial world and led to stricter disclosure rules for companies.

Leading Skilling through the indictment, Petrocelli questioned him about the prosecutors' contentions that the conspiracy to disguise the Enron's true financial state began in 1999.

"There is no truth whatsoever to that allegation," Skilling said.

Earlier in the trial, former Enron investor relations executives Mark Koenig and Paula Rieker and former Enron accountant Wesley Colwell testified that Enron used accounting tricks to increase earnings in 1999 and 2000.

Skilling has portrayed Enron as a healthy, vibrant company even up until his resignation in August 2001, less that four months before it filed for bankruptcy.

He and Lay contend Enron collapsed after investors lost confidence and triggered a "run on the bank" after learning former Chief Financial Officer Andrew Fastow had skimmed tens of millions of dollars from partnerships he operated that bought up Enron assets.

Fastow, who struck a cooperation agreement with prosecutors and will serve a 10-year prison sentence, testified earlier in the trial that the deals with his LJM partnerships were designed to hide billions of dollars in losses at Enron while inflating its earnings.

Skilling faces 28 charges of conspiracy, fraud and insider trading, and Lay faces six charges of conspiracy and fraud.

Both men have pleaded not guilty and face decades in prison if convicted at the trial that began at the end of January.