Footnote 8

manipulation” in Enron’s financial statements. RBS 3118973 (quoted in Exam. IV, App. E at 81).Nevertheless, RBS participated in Nixon in hopes of getting future Enron business. RBS saw Nixonas an opportunity to “[o]nce again uptier the Enron Corp. relationship by assisting them over theircrucial de-leveraging periods of quarter and year ends.” RBS 3018561 (quoted in Exam IV, App. Eat 16 n.56). In considering an extension of Nixon, another RBS analyst reported: “[t]he scale offinancial period manipulation is exceedingly worrying.” RBS 3118862 (quoted in Exam. IV, App.E at 82).670. The Nixon prepay settled on April 14, 2000 (less than half a year after it began), andRBS netted approximately $2.5 million in interest on its $110 million loan. Because of itsparticipation in Nixon, RBS profited for itself and knowingly facilitated the Insider’s creation anddissemination of misleading Enron financial statements.j. RBC knowingly assisted the Insiders in misstating Enron’s financialcondition.671. RBC’s participation in the Insiders’ manipulation of Enron’s financial statements wasintegral to the Insiders’ scheme. RBC knew the Insiders were using SPE and other structuredfinance transactions to manipulate Enron’s financial statements. RBC helped the Insiders achievetheir improper goals by designing and financing the Alberta prepay transaction (“Alberta”). Inaddition, RBC participated in Hawaii with full knowledge that the Insiders had guaranteedrepayment of CIBC’s equity in the transaction, causing the transaction’s accounting to bemisleading. RBC assisted the Insiders in overstating Enron’s cash flow from operations andunderstating Enron’s debt, helping to hide Enron’s true financial condition.672. The ENA Examiner has reviewed and criticized RBC’s participation in the Insiders’scheme. In connection with his investigation of RBC, the ENA Examiner reviewed many of RBC’sEnron-related transactions, including Alberta and Hawaii. The ENA Examiner also investigated the604041v1/007457-231-