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343. Between late 1997 and Enron’s bankruptcy, Chase and Enron averaged more thanone transaction per month. For these transactions, Chase earned fees of over $96 million. Includedin the transactions were at least 12 prepay transactions with a combined value of more than$4.8 billion. There were also many FAS 140 transactions and two minority interest transactions(Choctaw and Zephyrus). The prepays, especially, were extremely lucrative for Chase. Forexample, at the end of June 2000 Chase entered into an Enron prepay transaction with the Insidersthat was, effectively, a $650 million loan. For arranging the transaction, Chase received an upfrontfee of approximately $1.6 million. If the loan had resolved as the parties anticipated and intended(that is, if Enron had not filed bankruptcy), Chase would have received from Enron the return ofChase’s $650 million in principal plus $150 million in interest and fees.344. Throughout the relevant period, Chase maintained an office in Houston, Texas.Chase executives and other personnel in the Houston office were involved in the SPE transactionswith Enron. Rick Walker, the Enron relationship manager for Chase, was located in its Houstonoffice. Walker, among other Chase personnel, played a key role in the Chase SPE transactions withEnron. Walker was involved in structuring and implementing the Chase prepays with Enron, andWalker observed early on that a prepay “represents a term loan embedded in a commodity swap.”JPMBKR 0001991 (quoted in Exam. III, App. D at 19) Walker was a member of the Chase teamwhich structured the Fishtail transaction involving Enron’s forest products business, and Walker wasthe client executive on Chase’s participation in the Hawaii transaction. See JPMBKR-S 0010295-311; JPMBKR 0134664-678. Walker also successfully pressed for Chase to invest in LJM2, towhich it ultimately committed $20 million.(2) The Chase prepay transactions.345. Chase has a unique role in the history of Enron’s prepay transactions – Chaseinvented the Enron version. It therefore considered the Enron prepays to be proprietary transactions,604041v1/007457-114-