updated 5/22/2006 7:14:18 PM ET 2006-05-22T23:14:18

Kenneth Lay gave an encore performance on the witness stand Monday, this time playing to an audience of just one, and took a stark new turn — admitting he did not comply with rules spelled out in bank documents that bore his signature.

The Enron Corp. founder testified in his own defense at a nonjury trial on charges he reneged on agreements with banks that loaned him money, but he insisted he meant no harm and said he regretted not paying more attention to his personal finances.

Asked by one of his defense lawyers whether he knew now that he had not fully complied with the rules of the loan documents, Lay addressed U.S. District Judge Sim Lake specifically.

“Very much so, Your Honor,” he said. “There’s no doubt that we did not fully comply with all the provisions of those documents.” He said he never would have made intentional false statements “if I’d known what all the facts were.”

Lay’s executive assistant, Rosalee Fleming, testified Lay spent far more time on Enron business than on his own finances. And Lay said he regretted he did not have more time to devote to his personal finance.

“Perhaps this is one of the consequences of that,” he said.

Lake will decide Lay’s fate on four charges — one count of bank fraud and three counts of making false statements — all tied to pledges that he would not use cash he borrowed privately from three banks to buy or carry margin stock.

The case is being tried separately from the fraud and conspiracy case against Lay and former Enron Chief Executive Jeffrey Skilling. Jurors in that case finished a third day of deliberations Monday without reaching a verdict.

For Lay, the testimony Monday in the bank-fraud case seemed to be a change from his testimony in the fraud and conspiracy case, where he quarreled even under questions from a member of his own defense team.

But the real test lies ahead: Prosecutor John Hueston, who sparred with Lay in a searing cross-examination several weeks ago in the fraud case, will get his chance to question the Enron founder on the bank charges some time Tuesday.

Lay also sought to play down an element of the bank case that got wide media attention late last week, some of it derisive — the notion that an automatic-signature machine was used to sign some of the bank agreements.

While Lay said he did not read every word of documents he signed, he said he was upset at how much had been made of the signature machine. His lawyer Ken Carroll asked whether “some robotic Autopen was out there running rampant,” signing his name.

“Certainly in my mind, Your Honor, I’ve always considered that to be an equal, authorized signature, just like my own signature,” he said.

Owning up to mistakes in not following the rules of the bank documents was perhaps Lay’s only choice: The government earlier in the day had called an FBI agent to the stand to talk about the papers, which bore Lay’s signature and clearly spelled out a ban on using the loan money to buy margin stock.

“The statements that the funds would not be used to buy margin stock were not true because funds were used to buy margin stock,” said the witness, FBI special agent Robert Cunnane.

Prosecutors allege that beginning in 1999, Lay obtained $75 million in loans from three banks — Bank of America, Chase Bank of Texas and Compass Bank — and then reneged on an agreement not to use the money to carry or buy stock or mutual funds.

The government rested its case earlier Monday, before Lay’s executive assistant and Lay himself testified for the defense, and the judge appeared to be open to dismissing one of the false-statements counts that relates to his Compass Bank loan.

In that instance, Lay and his wife, Linda, appeared to have signed a form accepting a $10 million draw on a line of credit and sent it to the bank without checking the box to pledge not to buy margin stock. The bank apparently filled in the box itself.

Lake has said he will issue his verdict in the bank-fraud case after jurors in the broader fraud and conspiracy trial render theirs.

Earlier in the day Monday, a personal accountant to Lay testified she was unaware when she transferred money from loans Lay had obtained that federal regulations barred use of some of the money for stock purchases.

Sherrie Gibson, contradicting her own grand jury testimony from several years ago, said sometimes she decided herself which of Lay’s multiple lines of credit to use. “It’s not accurate to say he told me every time,” she said.

After saying that prosecutors made her feel pressured to testify that Lay always picked the lines of credit for stock purchases, Gibson added that she did not intend her actions to be deceptive.

“I never think in terms of sneaky,” she said.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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