Houston ? Lawyers for former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling insisted Tuesday the men were guilty of no crimes, arguing the company was never infested with fraud and instead fell victim to a sudden crisis of market confidence.

Lay and Skilling were pioneers in the energy trading industry who deeply loved their company – which stands to this day, Lay lawyer Michael Ramsey said, as “one of the finest free-market institutions the world has ever seen.”

A federal prosecutor laid out a different version of events, telling jurors in opening statements in the men’s trial that they lied to Wall Street and their own employees to cover up the crumbling finances that drove what was once the nation’s seventh-largest company into bankruptcy protection in December 2001.

Daniel Petrocelli, arguing for Skilling, went so far as to suggest 13 of the 16 Enron executives who have pleaded guilty to federal crimes were innocent but caved in to intense pressure from zealous federal prosecutors.

“This is not a case of hear-no-evil, see-no-evil,” Petrocelli said. “This is a case of there was no evil.”

Directly countering four years of negative publicity that turned the very name Enron into a symbol of accounting chicanery, Petrocelli said, “There’s no evidence any books were cooked at Enron.”

Former Enron CEO Jeffrey Skilling, left, and his attorney Daniel Petrocelli address the media after leaving the federal courthouse Tuesday in Houston. Skilling and Enron founder Kenneth Lay are facing fraud and conspiracy charges.

But federal prosecutor John Hueston said Skilling and Lay sold Enron stock before a massive fraud was exposed.

Hueston, part of the Justice Department’s Enron Task Force, said Lay and Skilling sold Wall Street, auditors and their own workers a story of a “simply magical ability” for Enron to record consistently impressive growth.

“But inside the doors of Enron, something was terribly wrong,” he said.

The dramatically different portrayals before a jury of eight women and four men kicked off what could be a four-month trial of Lay and Skilling, who are accused of fraud and conspiracy and could face prison for the rest of their lives if convicted.

The Enron trial is perhaps the most closely watched of the corporate fraud cases that followed the implosion of the Houston energy-trading giant more than four years ago.

Both defense lawyers suggested the company was the victim of market panic in 2001, and Petrocelli said Enron behaved like Nasdaq stocks that tanked when the dot-com bubble burst. He called Enron’s bankruptcy a tragedy and said the company “was the victim of an immediate, unexpected and temporary drain on its liquidity.”

The first prosecution witness today is expected to be Mark Koenig, former head of Enron’s investor relations department.