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

finance certain of the partnerships Enron controlled and their illicit transactions with SPEs –
including LJM2 – knowing they were vehicles being utilized by Enron to falsify its reported
financial results; and also engaged in numerous deceptive transactions with Enron to disguise
billions of dollars in loans to Enron. Lead Plaintiff also argued that the complaint properly pled
scienter as to JPMorgan, and also adequately alleged claims against JPMorgan under the TSA. The
Court ruled that Lead Plaintiff’s Consolidated Complaint stated a claim against this defendant with
its allegations that JPMorgan made repeated “loans” of about $5 billion to Enron between 1997 and
2000 which were disguised as commodities trades, was extensively involved in structuring
fraudulent Enron transactions with Enron, and failed to disclose certain transactions, and issued
analyst reports on Enron containing material misrepresentations. See Enron, 235 F. Supp. 2d at 695-
97.
(d)
Deutsche Bank AG (Docket No. 716) argued for dismissal because the
complaint failed to plead scienter or materiality; Deutsche Bank’s allegedly fraudulent analyst
reports did not make assertions of fact; the complaint was not pled in conformity with Rule 8; and
the complaint failed to state a claim for control person liability. On June 10, 2002, Lead Plaintiff
filed a 109-page opposition to Deutsche Bank’s motion to dismiss (Docket No. 848), arguing that
Deutsche Bank faced liability because it sold Enron and Enron-related securities to investors via
false Registration Statements; issued false analysts’ reports on Enron; employed manipulative and
deceptive devices; and participated in a scheme to defraud purchasers of Enron’s securities. Lead
Plaintiff highlighted its allegations that Deutsche Bank participated in loans and lending
commitments of over $2 billion to Enron; and helped raise over $5 billion for Enron via the sale of
Enron and Enron-related securities. Lead Plaintiff also argued that the complaint properly pled
scienter as to Deutsche Bank. The Court dismissed the claims against Deutsche Bank. See Enron,
235 F. Supp. 2d at 704.
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