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

• CSFB understood, inter alia, that the share-trust transactions it did with Enron
“were a way to finance assets and were not true operating companies” (id., 50).
2. LJM2 and New Power Allegations
In a further attempt to divert the Court’s attention from the merits, CSFB next accuses
Lead Plaintiff of making false allegations about its role in the deceptive LJM2 vehicle. Defs’
Mem. at 16-17. CSFB challenges the allegation that “‘[CSFB], or senior executives of the firm,
invested $22.5 million in equity money to facilitate the financing of LJM2’” and claims “[n]ot a
single CSFB or DLJ executive made a personal investment in LJM2, let alone the $22.5 million
alleged in the Complaint.” Id. at 16 (quoting FACC 712). 15
Plaintiffs never claimed CSFB
executives invested $22.5 million in LJM2, but instead pleaded “CS First Boston, or senior
executives of the firm, invested $22.5 million in [LJM2] . . . [by] using DLJ Fund Investing
Trust Partners and Merchant Capital . . . .” See FACC 712; see also FACC 102(a) (defining
“CS First Boston” to include CSFB and DLJ). Merchant Capital and DLJ Fund Investment did
invest in LJM2, as plaintiffs alleged (with slight misnomer for the DLJ Fund) and as CSFB
admitted on page 16 of its Motion. CSFB, however, omitted these entities from the very
sentence it now claims was false. And DLJ Fund did invest monies of DLJ “executives” in
LJM2. CSFBSJ Ex. 2, 2 16 (DLJ Fund “managed approximately $575 million invested by over
600 employees of Donaldson, Lufkin & Jenrette . . . and its affiliates.”). 17
15
All “FACC _” or “FACC _” references refer to the First Amended Consolidated
Complaint (“FACC”) (Docket No. 1388).
16
All references to “CSFBSJ Ex. __” refer to the exhibits attached to the Declaration of
Odean L. Volker (Docket No. 4825).
17
CSFB emphasizes it and DLJ “committed” to investing in LJM2 – in contrast to having
actually invested – only $15 million. Defs’ Mem. at 16. Commitment to invest versus actual
investment is just semantics and in no way evidences any intent to mislead the Court. As for the
$22.5 million number, CSFB invested $15 million in LJM2 plus the $7.5 million the Bank
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