The Enron trial is nearing its end and closing arguments could happen as soon as May 15th. Defence attorneys are expected to call more witnesses next week.

Towards the end of last week, the trial heard about former chief executive Kenneth Lay's decision to sell the company's stock of pay off substantial loans.

As Enron was collapsing, Mr Lay was forced to sell $70 million (€55 million) in company stock he had used as collateral on personal loans because he needed to cover margin requirements, a witness for the defence testified during the week.

The declining value of Enron's stock reduced the collateral on the loans, and Mr Lay was obligated to pay them down, Texas Christian University Prof Christopher Barry testified.

The defence called Prof Barry as an expert witness to counter prosecutors' contention that Mr Lay sold the shares back to Enron to avoid publicly disclosing his sales in monthly regulatory filings and possibly raising investor concerns about the large transactions.

Mr Lay sold the shares back to Enron in 2001 by repeatedly drawing down a personal credit line and paying it back with his shares. He has contended that he tried to avoid selling the stock he had used as collateral for about $100 million in personal bank loans.

Lay (63) and former Enron chief executive Jeffrey Skilling, (52) are on trial in federal court, charged with lying to investors to hide the deteriorating financial health of the company that was once the seventh-largest in the US.

Mr Lay faces six counts of conspiracy and fraud, and Mr Skilling faces 28 counts of conspiracy, fraud and insider trading. Both face decades in prison if convicted at the trial, which has lasted more than three months.

Enron collapsed into the then-largest ever US bankruptcy in December 2001 after the revelation that it had used off-balance sheet deals to hide billions of dollars in debt and to inflate profits.

Defence lawyers told US district judge Sim Lake they expect to call five more witnesses and could wrap up their case on Monday, when the trial resumes.

Prosecutors would then present their rebuttal witnesses over the next two days, and closing arguments are likely to begin on May 15th.

The government team confirmed in court for the first time on Thursday that they would not call former Enron chief accounting officer Richard Causey to the witness stand during their rebuttal.

Mr Causey had been set to go on trial with Mr Lay and Mr Skilling but struck a deal with prosecutors before the trial began and pleaded guilty to securities fraud in exchange for a maximum seven-year sentence.

He was then expected to testify, since he had worked closely with Mr Lay and Mr illing and had the best inside look at company's finances.

A US justice department spokeswoman declined to comment on why Mr Causey would not be called to testify.

One legal expert said perhaps neither the defence nor the government was anxious to put Mr Causey in front of the jury because his testimony could have been damaging to both teams.

"Both sides knew what he could provide, and they both decided not to call him," said Joel Androphy, a Houston lawyer with Berg & Androphy, who has attended much of the trial.

Judge Lake said he expected to begin a separate case against Mr Lay on May 18th on charges that he illegally used bank loans to buy stock on margin.

- (Reuters)