Ken Lay's conviction tossed out by judge
Conspiracy, fraud verdicts vacated because late Enron founder can't appeal.
HOUSTON (CNN) -- A Houston judge Tuesday vacated Enron founder Kenneth Lay's fraud and conspiring convictions from the company's 2001 collapse, citing Lay's inability to appeal, according to a court administrator.
Lay, 64, died in July from severe coronary artery disease in Aspen, Colo., as he was awaiting sentencing, according to Dr. Robert Kurtzman.
Judge Sim Lake's decision terminates the criminal case against Lay and its effects on his estate, which was left to Lay's wife, Linda.
But according to Linda Lay's attorney, Sam Buffone, Lake's ruling does not have an impact on any of the many pending civil claims made on the Lay estate related to the collapse of Enron nor on any claims that may be filed in the future.
The motion to vacate Lay's conviction was made on behalf of his estate. The judge also dismissed Lay's indictment.
Lay was scheduled for sentencing on Oct. 23 after his May conviction on 10 counts of fraud and conspiracy related to the collapse of the company he founded.
Under Lay's hand, Enron grew into the nation's seventh-largest company before imploding in an accounting scandal in 2001. Lay was accused of lying to investors and Wall Street about the company's health even as he enriched himself by selling millions of dollars in stock.
The company filed for bankruptcy in December 2001 after investigators found it used off-the-books partnerships to inflate profits and conceal more than $1 billion in debt. Its downfall cost 4,000 employees their jobs and many of them their life savings and led to billions of dollars of losses for investors.
Enron's collapse marked the first of the high-profile corporate scandals that rocked the nation, followed by WorldCom, Global Crossing, Adelphia and Tyco (up $0.02 to $29.60, Charts). The wave of fraud, which included SEC settlements with Citigroup (up $0.14 to $50.19, Charts) and Merrill Lynch (down $0.14 to $84.38, Charts), led to passage of the Sarbanes-Oxley law that tightened oversight of how American companies are audited.
--by CNN's Katy Byron in New York