Judge wipes out former Enron founder's fraud conviction

A US judge has erased the conviction of Enron founder Kenneth Lay who died in July, wiping out a jury's verdict that he committed fraud and conspiracy in the months before his company's collapse.

Lay was convicted of 10 counts of fraud, conspiracy and lying to banks in two separate cases.

Enron's collapse in 2001 wiped out thousands of jobs, more than $60bn in market value and more than $2bn in pension plans.

Lay died of heart disease while on holiday with his wife, Linda, in Aspen, Colorado.

US District Judge Sim Lake, in a ruling yesterday, agreed with Lay's lawyers that his death required erasing his convictions.

They cited a 2004 ruling from the 5th US Circuit Court of Appeals that found that a defendant's death pending appeal extinguished his entire case because he had not had a full opportunity to challenge the conviction and the government should not be able to punish a dead defendant or his estate.

His co-defendant, former Enron chief executive Jeff Skilling, will be sentenced on Monday.