Former Enron Corp. chairman Kenneth Lay pleaded not guilty to federal charges that he defrauded investors and lied to Wall Street about his company’s financial problems.

In a 65-page federal grand jury indictment, Lay was charged with 11 criminal counts, including securities, wire and bank fraud, and making false statements to banks. He was not accused of insider trading.

Lay, who turned himself into the FBI then was taken to the federal courthouse in handcuffs to stand before U.S. Magistrate Judge Mary Milloy, said “Not guilty” in a loud voice when she asked how he pleaded to the charges. His bond was set at US$500,000.

In addition to federal criminal charges, the Securities and Exchange Commission Thursday filed civil charges against Lay. The SEC says that it is charging Lay for his role in the scheme to defraud by falsifying Enron’s publicly reported financial results and making false and misleading public representations about Enron’s business performance and financial condition.

The commission also alleges Lay profited from the scheme to defraud by selling large amounts of Enron stock at prices that did not reflect its true value. The SEC says that the sales occurred while Lay was in possession of material non-public information concerning Enron and generated unlawful proceeds in excess of $90 million during 2001. Lay’s proceeds from the sales constitute illegal gains resulting from his scheme to defraud, it alleges.

In this action, the commission is seeking disgorgement of all ill-gotten gains, civil money penalties, a permanent bar from acting as a director or officer of a publicly held company, and an injunction against future violations of the federal securities laws.

“From the very beginning, our mandate has been to hold accountable those who contributed to the false portrayal of Enron as a viable, thriving entity,” SEC Enforcement Division director Stephen Cutler, said in a release. “As Enron’s chairman and chief executive officer, Mr. Lay was an engaged participant in the on-going fraud, and must therefore be called to account for his actions.”

The SEC filed a second amended complaint seeking to add Lay to its pending action against Jeffrey Skilling, Enron’s former president, CEO and chief operating officer, and Richard Causey, Enron’s former chief accounting officer. The proposed amended complaint charges Lay with violating, and aiding and abetting violations of, the antifraud, periodic reporting, books and records, and internal controls provisions of the federal securities laws.

At a news conference today, Lay defended himself and announced his intention to fight the government charges against him vigorously, and hopefully sooner rather than later. He was released on bail after turning himself in to the Houston FBI this morning, and being charged with 11 counts relating to the fraud that ultimately killed Enron.