Footnote 8

(3) BT/Deutsche Bank limited its Enron exposure.503. BT/Deutsche Bank’s frequent contact with the Insiders gave it the opportunity tolearn the “facts behind the numbers” in Enron’s financial statements. Exam. III, App. G at 20(quoting Paul Cambridge sworn statement). By as early as 2000, BT/Deutsche Bank knew enoughabout Enron’s financial situation to begin to attempt to reduce its exposure to Enron – exposure thatexceeded $600 million by June 1999. By October 2001, BT/Deutsche Bank became so worriedabout the extent of Enron’s off-balance sheet debt that it refused to authorize any further credit. Thisdespite the fact that Enron’s external ratings were still favorable.504. BT/Deutsche Bank held periodic meetings with the Insiders to discuss the realitybehind Enron’s financial statements. The Insiders laid no “ground rules” in these meetings as towhat could not be discussed. So BT/Deutsche Bank routinely asked to be briefed on Enron’s tradingactivity revenues, its philosophy regarding asset sales, and the level of its off-balance sheetobligations. At one such meeting, BT/Deutsche Bank learned that in the fourth quarter of 2000,Enron had used SPE sales to inflate reported cash flow from operating activities from $100 millionto almost $5 billion. As a result of those one-on-one discussions, BT/Deutsche Bank was able tomake its own estimate of Enron’s off-balance sheet obligations, and confirm that number with theInsiders.505. BT/Deutsche Bank’s private knowledge was clearly at odds with its publicstatements. From at least January 13, 1999 until at least September 15, 2000, BT/Deutsche Bankanalysts consistently rated Enron a “Buy.” In its January 28, 2000 report, BT/Deutsche Bank notonly rated Enron a “Buy,” but raised the stock’s target price to $90, predicting a 15% three-year EPSgrowth rate. BT/Deutsche Bank succinctly summed up its alleged view of Enron: “All we can sayis WOW!” Two months later, on April 14, 2000, BT/Deutsche Bank reiterated its “Buy” rating andraised the stock’s target price to $96 and its three-year EPS growth rate to 16%. Five months later,604041v1/007457-163-