HOUSTON -- Former Enron finance chief Andrew Fastow testified on Tuesday that he ran financial partnerships aimed to help Enron mask as much as hundreds of millions of dollars in losses.

The 44-year-old former Enron financial whiz began his testimony in the federal trial of his former bosses, Enron founder Kenneth Lay and former CEO Jeffrey Skilling.

Lay and Skilling are accused of fraud, conspiracy and other charges in the spectacular collapse of Enron in 2001.

Fastow told jurors about a partnership, known as LJM, designed to help Enron "solve a problem" -- that it was facing future losses from its investment in a small startup firm.

Prosecutors have said the partnership was designed to purchase underperforming assets from Enron so that the energy company could boost earnings and get debt off its balance sheet.

The ex-CFO testified his role in the partnerships violated Enron's code of conduct. That barred Enron officers from participating in ventures that posed a conflict of interest.

Fastow has already pleaded guilty and faces up to 10 years in prison on two counts of conspiracy.

Fastow took the stand after lawyers finished questioning Kevin Hannon, a former executive in Enron's broadband unit.

Hannon provided the trial's most dramatic moment so far: He quoted Skilling as saying "they're on to us" in a May 2001 meeting with top executives when a small analyst firm began to question Enron's finances.

But under cross-examination on Monday, Hannon conceded it was possible Skilling was just being sarcastic.

In testimony last week, Hannon told jurors Skilling misled Wall Street about the failing broadband unit's future.

But under cross-examination, Hannon acknowledged telling the Securities and Exchange Commission he was optimistic about the unit's prospects.

On the witness stand on Monday, Hannon admitted he had lied to the SEC.

Hannon is among 16 former Enron executives who have pleaded guilty to crimes.

Skilling faces 31 counts of fraud, conspiracy, insider trading and lying to auditors for allegedly lying about Enron's financial strength.

Lay faces seven counts of fraud and conspiracy for perpetuating the alleged scheme after Skilling resigned in August 2001.

Both men have pleaded not guilty.

If convicted, each could face decades in prison and millions of dollars in penalties.

Enron was once the nation's seventh-largest company.

Before 2001, it was considered an innovative new-economy maverick and admired as a top stock performer. But a spectacular collapse left thousands jobless and slammed Wall Street with billions in losses.