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d. The Insiders engaged in a scheme that used SPEs improperlyto prop up Enron’s credit rating . . . . . . . . . . . . . . . . . . . . . . . . . . 45(1) The Insiders applied accounting techniquesimproperly to four types of transactions . . . . . . . . . . . . . 46(2) The Enron prepay transactions were loans improperlydisguised as commodity trades . . . . . . . . . . . . . . . . . . . . 48(3) The Insiders used FAS 140 transactions improperly tohide and move debt off Enron’s balance sheet and toincrease cash flow ..............................54(4) The Insiders used minority interest transactionsimproperly to hide debt ..........................58(5) The Insiders used tax transactions improperly togenerate paper income ...........................61e. The scheme gave the Insiders and the Bank Defendants timeand opportunity to profit at Enron’s expense . . . . . . . . . . . . . . . . 62(1) In late 1997, Fastow and Kopper formed Chewco . . . . . . 64(2) In 1999, Fastow and Kopper expanded their schemeby creating the LJM partnerships . . . . . . . . . . . . . . . . . . . 64(3) In 1999, CSFB and RBS aided Fastow by knowinglyparticipating in and supporting LJM1 . . . . . . . . . . . . . . . 65(4) In 1999, the Bank Defendants aided Fastow andKopper by knowingly participating in and supportingLJM2 ........................................69f. Enron’s outside directors were unaware of the scheme . . . . . . . . 734. The Bank Defendants Knowingly Participated In Manipulating AndMisstating Enron’s Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . 76a. Citigroup knowingly assisted the Insiders in misstatingEnron’s financial condition .............................76(1) Citigroup’s relationship with Enron . . . . . . . . . . . . . . . . . 80(2) The Citigroup prepays ...........................84(3) The minority interest transactions . . . . . . . . . . . . . . . . . . 95604041v1/007457-iii-