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

a result, the analyst reports themselves are actionable as well as predicate acts in furtherance of
the overall scheme.
D. Red Herrings
1. CSFB’s Laurence Nath
In response to all of the above, CSFB sets up a series of red herrings or straw men to
knock down or divert the Court’s attention from the hard facts demonstrating primary liability.
Specifically, CSFB spends an extraordinary amount of time attacking plaintiffs’ allegations
regarding Laurence Nath, asserting there is not a shred of evidence to support the Nath
allegations and flat out asserting the allegations are false. Defs’ Mem. at 2. The recent
declaration provided by Andrew Fastow puts this repeated attack to rest – at least until a jury
decides the level of Nath’s engagement.
In this regard, Fastow viewed certain banks as “problem solvers” – i.e., the banks,
including CSFB, “worked to solve certain of [Enron’s] financial problems.” Fastow Decl., 6,
8. “In many instances, the banks primarily devised the financial structures, which contributed
to Enron achieving its financial reporting objectives.” Id., 6. 13
Fastow and certain of Enron’s
banks “worked together, intentionally and knowingly, to engage in transactions that would
affect Enron’s financial statements” (Fastow Decl., 7):
We told certain banks of our financial objectives and they, in many instances,
created solutions utilizing complex financial structures, including prepays, FAS
125/140 deals, share trusts, minority interests, and synthetic leases. I believe that
the manner in which some of these deals were reflected in Enron’s financial
statements might make it difficult for an investor to understand Enron’s true
financial condition and was deceptive. I believe that the banks presented these
structured-finance transactions in response to the problems we described to
them. We paid a premium – in the aggregate, hundreds of millions of dollars – in
13
See also, e.g., 10/23/06 Fastow Depo. Tr. at 53:24-54:7 (“In many cases, the banks
brought us these structures, and we executed the transactions with the banks.”).
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