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623. For most of 1998 and 1999, Enron’s outstanding obligations to Toronto Dominion(and therefore Toronto Dominion’s credit exposure) exceeded the target amount, or “ExposureGuideline,” that Toronto Dominion had set for Enron. Starting in mid-1999, Toronto Dominionbegan enforcing its credit exposure guidelines against Enron. See Exam. IV, App. G at 16.624. Toronto Dominion took additional steps to protect itself by purchasing creditprotection on a large portion of any new Enron exposure. Indeed, approval of the Alberta andLondon prepays by Toronto Dominion’s Risk Management Group was conditioned on obtainingcredit default protection for the full amount of the transaction. See Exam. IV, App. G at 17.625. Toronto Dominion’s concern about Enron’s financial condition continued to growduring 1999 and 2000, as Toronto Dominion executives expressed concern about the “manipulation”of Enron’s balance sheet. TDB-EX 002319-45, TDB-EX(1) 019965 (quoted in Exam. IV, App. Gat 6). In January 2001, senior Toronto Dominion executives met with senior Enron executives,including Fastow, to address Toronto Dominion’s concerns about Enron’s business and financialstrategies and risk management procedures. Immediately after the meeting, the head of TorontoDominion’s Risk Management Group directed that Toronto Dominion reduce its Enron exposureby October 31, 2001 – the end of Toronto Dominion’s fiscal year.626. In sum, Toronto Dominion – as a participant in the Insiders’ manipulation of Enron’sfinancial statements – was aware of Enron’s true financial condition, and took steps to protect itself.i. Royal Bank of Scotland/NatWest knowingly assisted the Insiders inmisstating Enron’s financial condition.627. Royal Bank of Scotland/NatWest’s (“RBS”) involvement in the Insiders’manipulation of Enron’s financial condition was also critical to the Insider’s scheme. RBSunderstood the Insiders were using various RBS transactions to disguise debt, manipulate cashflows, and inflate income from operations on Enron’s financial statements. RBS also understood604041v1/007457-214-