Lead Plaintiff's Opposition to CSFB MSJ 11/13/06 - The ENRON Fraud

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Page Press v. Chemical Inv. Servs. Corp., 166 F.3d 529 (2d Cir. 1999).............................................................................................187 Priester v. Lowndes County, 354 F.3d 414 (5th Cir. 2004) .............................................................................................18 Provenz v. Miller, 102 F.3d 1478 (9th Cir. 1996) ...................................................................86, 175, 187, 281 Quaak v. Dexia S.A., 357 F. Supp. 2d 330 (D. Mass. 2005) ..........................................................................33, 96 Rodriguez v. ConAgra Grocery Prods. Co., 436 F.3d 468 (5th Cir. 2006) .............................................................................................18 Rubinstein v. Collins, 20 F.3d 160 (5th Cir. 1994) .....................................................................................234, 260 SEC v. Canadian Imperial Bank of Commerce, et al., No. 03-5785 (S.D. Tex. 2003). ..........................................................................................97 SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180 (1963)...........................................................................................................21 SEC v. Fox, 855 F.2d 247 (5th Cir. 1988) ...........................................................................................235 SEC v. Hopper, No. H-04-1054, 2006 U.S. Dist. LEXIS 17772 (S.D. Tex. Mar. 24, 2006).......................................................................................... passim SEC v. Terry's Tips, Inc., 409 F. Supp. 2d 526 (D. Vt. 2006)...................................................................................267 Santa Fe Indus., Inc. v. Green, 430 U.S. 462 (1977).....................................................................................................20, 21 Shores v. M.E. Ratliff Inv. Co., No. CA 77-G-0604-5, 1982 U.S. Dist. LEXIS 10653 (N.D. Ala. Jan. 18, 1982).................................................................................................236 Sightsound.com, Inc. v. N2K, Inc., 391 F. Supp. 2d 321 (W.D. Pa. 2003)................................................................86, 175, 281 - xiii -
Page Simpson v. AOL Time Warner Inc. ("Homestore"), 452 F.3d 1040 (9th Cir. 2006) ................................................................................... passim Songbyrd, Inc. v. Bearsville Records, No. 96-30670, 1997 U.S. App. LEXIS 12684 (5th Cir. Feb. 4, 1997)........................................................................................17, 130, 138 Southland Sec. Corp. v. INSpire Ins. Solutions, 365 F.3d 353 (5th Cir. 2004) ...........................................................................................260 Stearns Airport Equip. Co. v. FMC Corp., 170 F.3d 518 (5th Cir. 1999) ..................................................................................... 210-11 Superintendent of Ins. v. Bankers Life & Cas. Co., 404 U.S. 6 (1971)...................................................................................................20, 21, 33 Thompson v. Johns-Manville Sales Corp., 714 F.2d 581 (5th Cir. 1983) ...........................................................................................281 Trust Co. v. N.N.P. Inc., 104 F.3d 1478 (5th Cir. 1997) .................................................................................186, 190 Tuchman v. DSC Communications Corp., 14 F.3d 1061 (5th Cir. 1994) ...................................................................................188, 190 United States v. Jon-T Chemicals, Inc., 768 F.2d 686 (5th Cir. 1985) ...........................................................................................286 United States v. Kung-Shou Ho, 311 F.3d 589 (5th Cir. 2002) ...........................................................................................187 United States v. O'Hagan, 521 U.S. 642 (1997)...........................................................................................20, 235, 267 Veillon v. Exploration Servs. Inc., 876 F.2d 1197 (5th Cir. 1989) ...........................................................................................18 Virginia Bankshares Inc. v. Sandberg, 501 U.S. 1083 (1991).......................................................................................212, 213, 233 Wortley v. Camplin, 333 F.3d 284 (1st Cir. 2003)............................................................................................269 - xiv -
Page 1 and 2: UNITED STATES DISTRICT COURT SOUTHE
Page 3 and 4: Page (2) Nile: Fake “Sale” of A
Page 5 and 6: Page (1) DLJ Concealed Transfer Res
Page 7 and 8: Page 4. CSFB’s Control Over Its S
Page 9 and 10: - viii - Page City of Monroe Emps.
Page 11 and 12: - x - Page In re Enron Corp. Sec. D
Page 13: Page Kunin v. Feofanov, 69 F.3d 59
Page 17 and 18: Lead Plaintiff The Regents of the U
Page 19 and 20: • Prepays: These were loans CSFB
Page 21 and 22: “‘Wrongdoers could studiously a
Page 23 and 24: internally that Enron’s reporting
Page 25 and 26: order to engage in structured-finan
Page 27 and 28: A. Well, Enron had a problem in tha
Page 29 and 30: CSFB denies making exorbitant retur
Page 31 and 32: activities of one of the banks at t
Page 33 and 34: ‘informing the district court of
Page 35 and 36: There is long-established doctrine
Page 37 and 38: e “construed not technically and
Page 39 and 40: CSFB argues throughout its brief th
Page 41 and 42: Enron, 310 F. Supp. 2d at 830. The
Page 43 and 44: Judge Kaplan rejected the defendant
Page 45 and 46: Id. at 625-26. The Court upheld the
Page 47 and 48: Order. And because of this Court’
Page 49 and 50: [R]egarding Credit Suisse First Bos
Page 51 and 52: a. Related-Party Transactions (1) L
Page 53 and 54: Rhythms Stock, and trading was thin
Page 55 and 56: NatWest. 49 The remaining limited p
Page 57 and 58: Ogunlesi Depo. Tr. at 294:25-295:15
Page 59 and 60: Diagrammatically, the transaction a
Page 61 and 62: This transfer, however, was a sham.
Page 63 and 64: As to LJM LP, CSFB contributed $7.5
Page 65 and 66:
false appearance of fact.” Homest
Page 67 and 68:
transaction “created the appearan
Page 69 and 70:
A. Yes. Q. It came from CSFB or an
Page 71 and 72:
Q. How were ERNB’s activities con
Page 73 and 74:
inherently deceptive nature of the
Page 75 and 76:
To give the appearance that Enron w
Page 77 and 78:
test). LJM LP was considered a sepa
Page 79 and 80:
and to disguise debt, Enron engaged
Page 81 and 82:
CSFB 2000 Prepay Morgan Stanley $15
Page 83 and 84:
Ex. 40330 (12/30/01 SEC Complaint a
Page 85 and 86:
price risk for the counterparties,
Page 87 and 88:
fluctuated with the price of oil. U
Page 89 and 90:
of commodity swaps, commodity price
Page 91 and 92:
Q. So the transaction being complet
Page 93 and 94:
against any credit loss on the deal
Page 95 and 96:
10 required that there existed “t
Page 97 and 98:
employees who worked on the 2000 Pr
Page 99 and 100:
Q. And Mr. Wootton was adamant that
Page 101 and 102:
Equally unavailing is CSFB’s obse
Page 103 and 104:
Where a wrongdoer, intending to dec
Page 105 and 106:
CSFB never directly misrepresented
Page 107 and 108:
(2) Year 2001 Fake Oil “Prepay”
Page 109 and 110:
As with the 2000 Prepay, the eviden
Page 111 and 112:
Thus, just as with the 2000 Prepay,
Page 113 and 114:
Under these Standards, an issuer co
Page 115 and 116:
funds from an SPE called Salamander
Page 117 and 118:
10/29/04 Deposition Transcript of D
Page 119 and 120:
EC35628A0051089. CSFB knew the Igua
Page 121 and 122:
expected return on the deal - even
Page 123 and 124:
a fiction, namely” (id. at 504) t
Page 125 and 126:
A. I think in this case it wasn’t
Page 127 and 128:
Id. at 710:25-711:9. Thus, one clea
Page 129 and 130:
CSFB and issuing $1 million of Cert
Page 131 and 132:
fact, both aspects of the Nile tran
Page 133 and 134:
Ex. 10211 at CSFBCO0005423523 (Augu
Page 135 and 136:
that the transaction was really a l
Page 137 and 138:
A. No. Q. To your knowledge, did an
Page 139 and 140:
Bass Depo. Tr. at 433:6-434:1; 11/3
Page 141 and 142:
crap” from the ServiceCo valuatio
Page 143 and 144:
Such deceptive conduct as well clea
Page 145 and 146:
in the deal. Defs’ Mem. at 40. Th
Page 147 and 148:
CSFB that “permitted [Enron] to r
Page 149 and 150:
As with Iguana and Nile, Nikita fai
Page 151 and 152:
Last business day of each calendar
Page 153 and 154:
But also, CSFB is additionally liab
Page 155 and 156:
knew was truly not at risk it, as d
Page 157 and 158:
Solomon explains 157 that in the Ra
Page 159 and 160:
funds to ENA. The loan between Sund
Page 161 and 162:
our credit risk is now directly 100
Page 163 and 164:
Depo. Tr. at 67:4-7. These three de
Page 165 and 166:
share-trust structure, Enron could
Page 167 and 168:
Solomon App. at 279. 177 The Osprey
Page 169 and 170:
The Condor Share Trust (“Condor
Page 171 and 172:
paid to the outside investor by the
Page 173 and 174:
the assets from Enron. Enron had bu
Page 175 and 176:
A. Yes. That was part of the struct
Page 177 and 178:
elated party to Enron, this “equi
Page 179 and 180:
A. Yes, I did. Q. (BY MR. HOWES) An
Page 181 and 182:
was a sham entity because it purpor
Page 183 and 184:
DLJ Employees DLJ Capital Corp LJM2
Page 185 and 186:
So DLJ would furnish the false appe
Page 187 and 188:
and $42.5 million of debt for the $
Page 189 and 190:
A. None that I recall. 8/1/05 Capol
Page 191 and 192:
ules were violated is sharply contr
Page 193 and 194:
Issuer entity) issued $1.024 billio
Page 195 and 196:
Diagrammatically, Marlin I appeared
Page 197 and 198:
DLJ knew the purpose of its Marlin
Page 199 and 200:
A. Structurally, yes, absolutely, c
Page 201 and 202:
CSFB further worked to execute Marl
Page 203 and 204:
to demonstrate simply that CSFB kne
Page 205 and 206:
F.3d 1061, 1068 (5th Cir. 1994); an
Page 207 and 208:
CSFB was no doubt highly interested
Page 209 and 210:
7/21/04 Moran Depo. Tr. at 209:4-10
Page 211 and 212:
ServiceCo - what it acknowledged as
Page 213 and 214:
CSFBCO005534606; Ex. 13923 at CSFBL
Page 215 and 216:
“55.6% of the equity in Rawhide I
Page 217 and 218:
Q. And the client was Enron? A. Yes
Page 219 and 220:
The Firefly transaction is further
Page 221 and 222:
Solomon Report at 301. CSFB knew th
Page 223 and 224:
on Enron’s investors - as long as
Page 225 and 226:
(Overview of Pricing for Marlin Wat
Page 227 and 228:
170 F.3d 518, 534 (5th Cir. 1999).
Page 229 and 230:
concerning Enron during the Class P
Page 231 and 232:
emained strongly bullish until Enro
Page 233 and 234:
* * * A. I think I’m just saying
Page 235 and 236:
(“Sicoardi”) it was a great buy
Page 237 and 238:
financials: “I should have taken
Page 239 and 240:
According to Sakol, “there was an
Page 241 and 242:
Q. And you said to them, I want to
Page 243 and 244:
A. No. 8/26/05 Deposition Transcrip
Page 245 and 246:
Q. But you knew at the time, in 199
Page 247 and 248:
13097A. The questions were sent not
Page 249 and 250:
Securities Laws §12:2 at 12-9-12-1
Page 251 and 252:
3. CSFB Breached Its Duty to Disclo
Page 253 and 254:
debt within the Nighthawk structure
Page 255 and 256:
. The Osprey I Offering Circular Co
Page 257 and 258:
eference to “Project Leftover,”
Page 259 and 260:
(Interrogatory Response Nos. 5 & 6)
Page 261 and 262:
(3) DLJ Concealed the Fact Enron Ne
Page 263 and 264:
f. The Osprey II Offering Circular
Page 265 and 266:
atios were not met and the “BBB
Page 267 and 268:
These statements were removed from
Page 269 and 270:
g. DLJ/CSFB Concealed LJM1 and LJM2
Page 271 and 272:
“Permitted Investments to Date”
Page 273 and 274:
Solomon Supplemental Report, Schedu
Page 275 and 276:
Offering Circulars because the “r
Page 277 and 278:
k. Plaintiffs Have Standing to Asse
Page 279 and 280:
CSFB argues “Dr. Nye admits that
Page 281 and 282:
Marlin and Osprey offering memorand
Page 283 and 284:
E. CSFB’s Conduct Was “In Conne
Page 285 and 286:
F. There Is a Genuine Issue of Mate
Page 287 and 288:
[Enron] would be unable to service
Page 289 and 290:
Company’s “reports of current r
Page 291 and 292:
counterparties. Nye Report, 51. But
Page 293 and 294:
As documented and considered by Dr.
Page 295 and 296:
U.S. Dist. LEXIS 41240, at *63-*64)
Page 297 and 298:
(FACC 450). These allegations sketc
Page 299 and 300:
2. Lead Plaintiff Need Only Show th
Page 301 and 302:
NAME Title at CSFB (USA) Title at C
Page 303 and 304:
structuring specialists in New York
Page 307 and 308:
WOLF POPPER LLP ROBERT C. FINKEL 84
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Lead Plaintiff's Opposition to CSFB MSJ 11/13/06 - The ENRON Fraud

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