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

In this Opposition, Lead Plaintiff demonstrates that its substantial evidence creates
genuine issues of material fact, and that its claims against CSFB are unquestionably cognizable
under the law, rendering the Bank unable to satisfy its heavy burden in seeking summary
judgment. Lead Plaintiff establishes that:
• Under this Court’s rulings concerning the scope of primary liability under Rule
10b-5(a) and (c), Lead Plaintiff’s claims that CSFB is liable for engaging in
inherently deceptive activity in regards to the transactions at issue are legally
cognizable (and strongly supported by the evidence);
• CSFB violated Rule 10b-5(b) by issuing false and misleading analyst reports
concerning Enron, with scienter and by otherwise breaching its duty to disclose
the adverse facts it knew about the Company;
• CSFB’s conduct was “in connection with” trading in Enron’s securities;
• Loss causation exists for CSFB’s conduct; and
• CSFB (USA) is liable as a control person.
During the Class Period, CSFB garnered significant fees directly from engaging in
inherently deceptive activities in regard to the identified transactions with Enron. It earned
multi-millions more from the investment banking business Enron gave it as a reward for the
Bank’s critical role in the Ponzi scheme. The evidence chronicled below discloses an unsettling
tale of CSFB’s morally flexible investment bankers and management – driven by sheer avarice in
the blind pursuit of these investment banking fees from Enron – knowingly and willingly
deceiving the Company’s investors through sham transactions and false analyst reports, shutting
out and simply avoiding the few conscientious Bank employees who resisted them. After
Enron’s collapse, internally CSFB was unregenerate and deceptive to the end, with one
employee joking that Enron’s collapse was “amazingly eloquent and almost FUNNY!” (Ex.
11178 at CSFBLLC05019537), and another employee remarking that his testimony to
congressional investigators concerning the Bank’s role in the Enron scheme would be “sanitized”
(Ex. 74 at CSFBC006057889.001). With the record more fully developed, the deceptive
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