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It was also troubling from the standpoint of Fastow personally wanting to do thetransaction. Because I think we all told him at various times that at some point thistransaction would come to light and he would look very, very bad.Exam. Final Report, App. F at 41. Jeffe also testified that:we are all taught there are lines of proper behavior and in terms of the way youcomport yourself, and this was something that I never ever would consider doingmyself even if I had approval from the President of the United States or the U.S.Supreme Court.Id. at pp. 40-41; see also CSFBCO 000005024 (cited in Exam. Final Report, App. F at 41).Notwithstanding CSFB’s concerns about Fastow’s inherent conflicts of interest, CSFB invested its$7.5 million in LJM1. In deciding to do so, CSFB was clearly guided by the importance of Fastow– and the business he doled out – to CSFB.(a)The Rhythms Hedge564. To establish the Rhythms Hedge, Enron transferred to LJM1 shares of Enroncommon stock having an aggregate stock price of $276 million. LJM1 transferred approximatelyhalf of those shares to LJM Swap Sub, another entity Fastow created specifically for the RhythmsHedge. In exchange, Enron received notes in the aggregate amount of $64 million (the “EnronNotes”) from LJM1 and a put (the “Rhythms Put”) from LJM Swap Sub. The Rhythms Put gaveEnron the right, in the future, to require LJM Swap Sub to purchase Enron’s Rhythms stock at$56.125 per share.565. CSFB knew that LJM Swap Sub was the only party liable for the Rhythms Put.CSFB also knew that LJM Swap Sub’s only asset was the Enron stock that LJM1 transferred to LJMSwap Sub. As a result, CSFB knew that the Rhythms Put did not actually transfer Enron’s economicrisk in Rhythms away from Enron – the transfer was to an entity whose only assets were Enron’sstock, which Enron provided.604041v1/007457-188-