12.07.2015 Views

Footnote 8

Footnote 8

Footnote 8

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

CSFB colleague two days before giving testimony that his “testimony” was being “‘sanitized’” inorder to “curry populist favor.” CSFBCO 006057889.001 (quoted in Exam. IV, App. L at 34-35n.123).599. CSFB’s incentive for continuing to recommend Enron’s stock in the face of CSFB’sactual knowledge of the magnitude of Enron’s true debt is obvious – CSFB wanted to keep Enronafloat by supporting Enron’s stock price, at least until CSFB finished extricating itself. CSFB usedits knowledge of Enron’s financial condition to its benefit and to the detriment of other Enroncreditors. See Exam. Final Report, App. L at 29-34. As one CSFB analyst wrote another onNovember 29, 2001– three days before Enron declared bankruptcy – “easy, we were in love withene and ene loved us. We were their number 1 supporter so the threat of a damaging research notewas zero. They needed us to publicly sell the stock almost as much as we needed them for the fees.”CSFBCO 006303837 (quoted in Exam. IV, App. L at 34-35 n.123).h. Toronto Dominion knowingly assisted the Insiders in misstating Enron’sfinancial condition.600. Toronto Dominion’s involvement in the Insiders’ manipulation of Enron’s financialcondition was an important aspect of the Insiders’ scheme. Toronto Dominion knew the Insiderswere using structured financing transactions, and particularly prepay transactions, to improperlyinflate cash flow from operations and disguise debt as price risk management liabilities on Enron’sfinancial statements. From 1998 to 2000, Toronto Dominion helped the Insiders achieve theirimproper goals by financing and/or implementing at least six prepay transactions, which arecollectively referred to as the “Toronto Dominion prepays.” Toronto Dominion also participatedin other transactions, such as JEDI, Hawaii, Firefly, and Bammel Gas, that were designed to reduceEnron’s on-balance sheet debt. The Toronto Dominion prepays alone provided Enron withapproximately $2 billion of financings, from which the Insiders improperly recorded approximately604041v1/007457-203-

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!