A federal judge in Houston has vacated the conviction of former Enron chief Kenneth Lay, the Associated Press reported Tuesday.

Lay, who died in Colorado on July 5, was convicted in May of defrauding investors by trying to hide the giant energy trading company's crumbling finances. Enron declared bankruptcy in December 2001, the biggest bankruptcy in the United States at the time.

Judge Sim Lake, who presided over the trial against Lay, had set sentencing for Oct. 23.

After his death, Lay's lawyers petitioned the judge to vacate the conviction, a course open to them since Lay died before he was sentenced for his crimes and therefore unable to appeal the verdict.

Vacating the 2004 indictment and 2006 conviction against Lay also blocks federal prosecutors' efforts to wrest any of Lay's ill-gotten gains from his estate.