Declaration Of Helen J. Hodges In Support Of Lead Counsel's ...

and is the basis for a presumption of reliance in a securities fraud case. He stated, “Defendants’
scheme to defraud and the resulting material misrepresentations and omissions by Defendants in the
Class Period regarding Enron’s financial and operating performance, financial condition, and
prospects did have a significant effect on prices of Enron securities, and served to inflate their prices
until the truth began to emerge and the prices fell.” 1/17/06 Expert Report of Blaine Nye, Ph.D. at
32. Thus his testimony supported the elements of loss causation and economic loss. In response, the
defendants fielded eight experts to attack Dr. Nye’s analyses. Defendants’ experts claimed Dr.
Nye’s damages analysis was flawed in numerous ways. Some of them “corrected” his “mistakes”
and generated aggregate damages of $17 billion and lower amounts. They also asserted that the
banks did nothing wrong and in any event, the defendants’ actions did not cause any investor losses.
In rebuttal, Dr. Nye stated, “The cause of investors’ economic losses was the inflation caused by the
concealment of Enron’s true risk, financial condition, performance, and prospects, resulting in
inflated prices of Enron securities, followed by the disclosure of the truth about these subjects,
events and disclosures which caused the prices of Enron’s securities to decline precipitously.”
4/13/06 Expert Rebuttal Report of Blaine F. Nye, Ph.D. at 5. In addition to these reports, Dr. Nye
prepared an expansive expert declaration in support of Lead Plaintiff’s Amended Motion for Class
Certification, and Dr. Nye also prepared an expert rebuttal declaration in response to expert opinions
submitted by defendants opposed to certifying a class. Dr. Nye testified at the hearing on class
certification in March 2006 and he was deposed for three days in May 2006.
216. Mr. Saul Solomon is a licensed CPA in Texas, Alabama and Mississippi. Mr.
Solomon also is a Certified Fraud Examiner, Certified Valuation Analyst and a Diplomat on the
American Board of Forensic Accounting. He currently is a Managing Director of UHY Mann
Frankfort Stein & Lipp Advisors, LP. Mr. Solomon provided a comprehensive expert report and
supplemental report concerning the accounting treatment of myriad Enron-related transactions, and
- 121 -