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

(j)
Arthur Andersen LLP (Docket No. 650) argued for dismissal because the
complaint failed to plead a primary violation of the securities laws and scienter; and certain of the
§11 claims failed because the complaint failed to allege Andersen’s consent to being named as
having prepared or certified certain information. On June 10, 2002, Lead Plaintiff filed an 86-page
opposition to Andersen’s motion to dismiss (Docket No. 854), arguing that Andersen faced liability
because it made false and misleading statements about Enron’s financial statements; and played a
significant role in authoring those financial statements. Lead Plaintiff also argued that the complaint
properly pled scienter as to Andersen. The Court ruled that Lead Plaintiff’s Consolidated Complaint
stated a claim against this defendant with its allegations of Arthur Andersen’s role as Enron’s public
auditor. See Enron, 235 F. Supp. 2d at 706-07.
(k)
Vinson & Elkins L.L.P. (Docket No. 648) argued for dismissal because the
Consolidated Complaint failed to plead a primary violation of the securities laws; and the
Consolidated Complaint failed to satisfy the PSLRA’s pleading requirements. On June 10, 2002,
Lead Plaintiff filed an 87-page opposition to Vinson & Elkins’ motion to dismiss (Docket No. 843),
arguing that Vinson & Elkins faced liability because it employed acts, contrivances and devices to
deceive; made or substantially participated in making false or misleading statements; and
participated in a scheme to defraud purchasers of Enron’s securities. Specifically, Lead Plaintiff
highlighted its allegations that Vinson & Elkins created the bogus transactions with the LJM
Partnerships and fake SPEs; issued false opinion letters; backdated documents; and whitewashed
employee allegations of fraud. Lead Plaintiff also argued that the complaint properly pled scienter
as to Vinson & Elkins. The Court ruled that Lead Plaintiff’s Consolidated Complaint stated a claim
against this defendant with its allegations of Vinson & Elkins’ involvement in the New Power IPO,
the Mahonia trades and the investigation of a whistleblower’s letter, as well as its co-authorship of
false and misleading statements. See Enron, 235 F. Supp. 2d at 704-05.
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