HOUSTON (CNNMoney.com) - In a third day of cross-examination, Daniel Petrocelli, attorney for former Enron CEO Jeff Skilling, continued grilling Enron's ex-chief of investor relations-turned-government witness Mark Koenig in an attempt to discredit him.

The defense's strategy rests on proving that Koenig, who pleaded guilty to securities fraud in 2004 and faces 10 years in prison and $1 million in fines, is not actually guilty of those crimes but was coerced by the government to enter the plea. The lawyers are trying to show that Koenig lacks sufficient knowledge about some of the company's operations -- including its trading, Internet and retail divisions -- to have known whether Skilling and Lay purposely lied to investors.

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The days proceedings featured featured video and tape recordings. But there was a tense moment in the afternoon's cross examination, the first time all day that Petrocelli turned combatitive. The defense attorney zeroed in on Koenig's earlier testimony to the government regarding Enron's April 2001 call to investors and analysts discussing its fourth quarter results.

Koenig had testified that for that quarter, Enron had purposely mis-stated the purpose of a reorganization, saying the real reason Enron moved about $200 million in assets from one division to another was to hide losses in its retail business unit.

Petrocelli pointedly asked Koenig whether Enron's management, under the terms of a particular accounting rule, was in fact required to disclose what its thought process was behind the reorganization and suggested that Koenig himself did not know the real reason.

Koenig testified that he believed the move was a deliberate one to hide losses based on what he had learned from company insiders at the time.

Petrocelli played most of a February, 2001 annual Enron employee meeting video as well as a conference call with investors, held March 23, in which Skilling addressed concerns about problems and rumors of problems within the company's various business units during the morning's proceedings.

Petrocelli periodically paused the employee video, during which Skilling frequently proclaimed that the companies businesses were in great shape, to ask Koenig questions about whether and when investors and analysts started expressing concerns about Enron's businesses.

He pressed Koenig on whether he knew about any internal concerns within Enron about unusually high short-selling activity within the company's stock around the time of February and March 2002. Koenig said that while he heard about short sellers all the time, he did not look closely at short interest in Enron's stock during any time he was at the company.

Earlier in the day, Petrocelli asked Koenig several questions pertaining to short sellers. The defense attorneys have suggested that short-sellers and panicked investors led to a "run on the bank," which they blame for Enron's collapse.

The testimony focused on February to March 2001, when investors began asking Enron tough questions about rumors of layoffs in its Broad Band division, a failed deal with Blockbuster Video to deliver films to customers over the Internet, and the potential losses it faced from its exposure to companies who were going bankrupt from the California energy crisis.

Defense attorneys are attempting to undermine the credibility of witnesses who are cooperating with the government, claiming they did so only under pressure from the U.S. government and to protect themselves and get reduced sentences.

Jacob Zamansky, a former federal prosecutor who currently works as a securities attorney in New York representing investors, said Petrocelli appeared to be setting the table for future witnesses, though he does not feel Petrocelli is having much luck undermining Koenig's testimony.

"It does not seem as though Petrocelli's cross examination is being very effective," said Zamansky. "Koenig appeared to be a very sincere and effective witness for the prosecution who clearly says he, Koenig, lied to investors and that Skilling and Lay were involved in that and were aware of the firm's crumbling finances as they were bullish to investors."

But Don Compton, a jury consultant, disagreed.

"He has a wonderful style – he is as good as they come," he said of Petrocelli. Compton praised Petrocelli's strengths in elegantly building an argument and winning over jurors.

Koenig is the first of several ex-Enron executives expected to testify against their former bosses in the trial.

Petrocelli is expected to wrap up his cross-examination tomorrow. His questioning will include the presentation of another 45-minute audio tape.

Skilling and Lay are being tried for a combined 37 counts of conspiracy and fraud in connection with the fall of Enron. Lay and Skilling have pleaded not guilty, claiming that there was no company-wide illegal activity at Enron apart from some crimes that Andrew Fastow, the company's chief financial officer, committed. The charges are connected to accounting manipulations that were allegedly intended to trick investors into thinking Enron was healthy while the company was suffering losses.

Enron's 2001 bankruptcy was the largest in history at the time, but it was soon eclipsed in the tide of corporate accounting scandals that followed. The bankruptcy filing by Enron, once the nation's seventh-largest company, cost 4,000 employees their jobs and many of them their life savings, and led to billions of dollars of losses for investors.

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