Enron Corp. - University of California | Office of The President

stock, selling 1.1 million shares in 1/01-3/02/01, at as high as $82 per share, pocketing $82 million
in illegal insider trading proceeds.
300. Each of the statements made between 3/31/00 and 3/1/01 was false and misleading
when issued. The true but concealed facts were:
(a) Enron's financial statements and results issued during this period were false
and misleading as they inflated Enron's revenues, earnings, assets, and equity and concealed billions
of dollars of debt that should have been shown on Enron's balance sheet, as described in 418-611.
(b) Contrary to the representations that Enron's transactions with its related parties
were fair to Enron and on terms representative of those that could be obtained in arm's-length
transactions with third parties, in fact, the transactions with Enron's related parties were grossly
unfair to Enron and set up in a manner to permit Enron to pay off key Enron insiders, including
Fastow and certain favored investment banks and bankers, for their participation in the scheme,
which included arranging the illicit and illegal financial transactions with those related parties on
terms that no independent third party would ever have agreed to, as detailed herein.
(c) Enron's financial condition, including its liquidity and credit standing, was not
nearly as strong as represented, as Enron was concealing billions of dollars of debt that should have
been reported on its balance sheet – and which would have very negatively affected its credit rating,
financial condition and liquidity – by improperly transferring that debt to the balance sheets of
various non-qualifying SPEs and partnerships it controlled, as detailed herein.
(d) Enron generated hundreds of millions of dollars of profits and transferred
billions of dollars of debt off its balance sheet by entering into non-arm's-length transactions with
SPEs and partnerships Enron controlled, including Chewco/JEDI, for which Enron had guaranteed
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