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through pervasive use of structured finance techniques involving SPEs andaggressive accounting practices, Enron so engineered its reported financial positionand results of operations that its financial statements bore little resemblance to itsactual financial condition or performance. This financial engineering in many casesviolated GAAP and applicable disclosure laws, and resulted in financial statementsthat did not fairly present Enron’s financial condition, results of operations or cashflows.Exam. II at 15.1. The Insiders Were Enron Officers With Power And Authority, Motivated ByGreed137. The Insiders were at least six Enron officers (although it is likely there were others):Andrew S. Fastow, Ben F. Glisan, Jr., Jeffrey McMahon, Michael Kopper, Richard A. Causey, andR. Davis Maxey. The Insiders held positions of authority and substantial responsibility atEnron – positions they abused by improperly using SPEs, manipulating Enron’s financial statements,and profiting from that manipulation at Enron’s expense.a. Fastow, Causey, McMahon, and Glisan caused Enron to enter into theimproper SPE transactions, and ensured the transactions wereimproperly reported.138. Fastow led the Insiders. From January 1997 to March 1998, Fastow was Senior VicePresident of Finance and a Managing Director of Enron. During that time, Fastow engaged in andencouraged the structured financing deals that eventually felled Enron. In March 1998, he waselevated to Chief Financial Officer. As CFO, Fastow’s direct reports included the Treasury and theSpecial Projects Groups. Fastow was fired for cause in October 2001.139. McMahon was also intimately involved with Enron’s finances from at least 1997through May 2000. Throughout 1997 and early 1998, McMahon served as Chief Financial Officerof Enron Europe. In July 1998, he became Senior Vice President of Finance and Treasurer ofEnron – a position that reported directly to Fastow. He remained Treasurer until mid-2000. When604041v1/007457-32-