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

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TABLE OF AUTHORITIES - vii - Page ABC Arbitrage Plaintiffs Group v. Tchuruk, 291 F.3d 336 (5th Cir. 2002) ...........................................................................................283 Abbott v. Equity Group, 2 F.3d 613 (5th Cir. 1993) .......................................................................................287, 288 Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972).............................................................................................20, 21, 262 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)................................................................................................... passim Barrie v. Intervoice-Brite, Inc., 409 F. 3d 653 (5th Cir. 2005) ..........................................................................................260 Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299 (1985)...........................................................................................................16 Bennett v. Calabrian Chems. Corp., 324 F. Supp. 2d 815 (E.D. Tex. 2004)...............................................................................17 Bieghler v. Kleppe, 633 F.2d 531 (9th Cir. 1980) .............................................................................86, 175, 281 Black v. J.I. Case Co., 22 F.3d 568 (5th Cir. 1994) ...............................................................................................18 Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975)...........................................................................................................16 Canova v. Shell Pipeline Co., 290 F.3d 753 (5th Cir. 2002) .............................................................................................17 Carson v. Dynegy, Inc., 344 F.3d 446 (5th Cir. 2003) .............................................................................................17 Celotex Corp. v. Catrett, 477 U.S. 317 (1986).....................................................................................................17, 18 Central Bank, N.A. v. First Interstate Bank, N.A., 511 U.S. 164 (1994)................................................................................................... passim Chiarella v. United States, 445 U.S. 222 (1980).........................................................................................................235
- viii - Page City of Monroe Emps. Ret. Sys. v. Bridgestone Corp., 399 F.3d 651 (6th Cir. 2005), cert. denied, 126 S. Ct. 423 (2005)..................................213 Colson v. Grohman, 174 F.3d 498 (5th Cir. 1999) .............................................................................................17 DeMarco v. Robertson Stephens Inc., 318 F. Supp. 2d 110 (S.D.N.Y. 2004)..............................................................212, 227, 228 Dirks v. SEC, 463 U.S. 646 (1983).................................................................................................235, 265 Do v. Wal-Mart Stores, 162 F.3d 1010 (8th Cir. 1998) .................................................................................105, 189 Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (2005).........................................................................................270, 276, 278 Emergent Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 343 F.3d 189 (2d Cir. 2003).............................................................................................269 EP Medsystems, Inc. v. Echocath, Inc., 235 F.3d 865 (3d Cir. 2000).............................................................................................269 Fin. Acquisition Ptnrs. v. Blackwell, 440 F.3d 278 (5th Cir. 2006) ...........................................................................................189 Finkel v. Docutel/Olivetti Corp., 817 F.2d 356 (5th Cir. 1987) ...........................................................................................262 First Virginia Bankshares v. Benson, 559 F.2d 1307 (5th Cir. 1977) .................................................................232, 233, 234, 260 Flock v. Scripto-Tokai Corp., 319 F.3d 231 (5th Cir. 2003) .......................................................................................17, 34 G.A. Thompson & Co. v. Partridge, 636 F.2d 945 (5th Cir. 1981) ...................................................................................283, 288 Giancarlo v. UBS Financial Services, Inc., H-03-4359 (S.D. Tex. Feb. 15, 2005)..............................................................................231 Goldstein v. MCI Worldcom, 340 F.3d 238 (5th Cir. 2003) ...................................................................................188, 189
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: Page 4. CSFB’s Control Over Its S
Page 11 and 12: - x - Page In re Enron Corp. Sec. D
Page 13 and 14: Page Kunin v. Feofanov, 69 F.3d 59
Page 15 and 16: Page Simpson v. AOL Time Warner Inc
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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