GREENVILLE, S.C. - Former Carolina Investors Chairman Earle Morris knew the company was in bad financial shape for five years before it went bankrupt, the former president of the Upstate firm says.

Larry Owen appeared in public Saturday for the first time since pleading guilty to securities fraud this summer for his role in the collapse of Carolina Investors, the biggest bankruptcy in South Carolina history.

Prosecutors accuse Morris of lying to investors. The 76-year-old former lieutenant governor has been charged with 22 counts of securities fraud. His trial started on Monday.

If convicted, Morris could face a maximum of about 200 years in prison and nearly $1 million in fines. There is no minimum sentence.

Owen's claim that Morris knew Carolina Investors was in bad shape starting in 1998 runs counter to Morris' defense that he was just a figurehead for the investment company and was not told by Owen or executives at parent company HomeGold how bad finances were at Carolina Investors.

Owen said he and Morris felt like they had no choice but to lie and say Carolina Investors was doing well.

"As soon as that news broke, the public would bolt," Owen said. "There was no way without an act of God that Carolina Investors would survive."

The company finally collapsed in spring 2003, leaving more than 8,000 investors out more than $275 million.

During cross examination, Morris' lawyer Joel Collins asked Owen if he ever said that "Earle was like a man on the outside looking in."

Owen denied saying that. But after the judge sent him out of the courtroom, Collins read a transcript of an interview he did with Owen in jail.

"Earle was not in the company involved with the day-to-day business of the company as long as I was," Collins said, reading Owen's answer from the transcript. "He was kind of on the outside looking in, I guess."

Owen cried several times during his testimony, saying it was difficult to be on the stand because Morris was a good friend.

He wore a suit, even though he has spent every day since pleading guilty July 24 in the Greenville jail. Owen will remain there, waiting for sentencing, until the state attorney general's office finishes its investigation.

On the stand, Owen apologized to the investors saying he decided to plead guilty because it was time to take responsibility for his actions.

"We had thousand of investors that relied on me and they were my friends and family and I let them down," Owen said. "God knows I am sorry and want them to forgive me. I can't explain the hurt that it has caused."