SAN FRANCISCO (MarketWatch) -- Kenneth Lay, founder and chief of scandal-ridden energy trading house Enron Corp., died Tuesday in Aspen, Colo., after suffering a massive heart attack, according to news reports Wednesday.

Lay was convicted in May of fraud and conspiracy for his role in Enron's spectacular collapse. He faced sentencing this fall, fully aware that he could spend the rest of his life in prison.

Lay, 64, was convicted on all six counts brought against him by federal prosecutors. He steadfastly maintained his innocence throughout the trial and vowed to fight the conviction through appeals.

Lay's defense attorneys unsuccessfully argued that Lay was the unwitting victim of illegal accounting schemes by subordinates. Lay also claimed the Houston-based company that he built up was brought down by negative media reports that triggered a classic "run" on Enron stock, insisting that the company's underlying finances had been sound.

Enron collapsed in December 2001, wiping out about $68 billion in market capital in what, at the time, was the biggest bankruptcy in U.S. history.

His protégé and co-defendant, Jeffrey Skilling, was convicted of 19 counts of fraud and conspiracy by the same jury. Skilling still faces sentencing.

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By Jim Jelter, MarketWatch
 
Jim Jelter is Industrials Editor for MarketWatch in San Francisco.

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