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

illicit partnerships or SPEs, and helped Enron falsify its financial statements and misrepresent its
financial condition, while its securities analysts were issuing extremely positive – but false and
misleading – reports on Enron extolling its business success, the strength of its financial condition
and its prospects for strong revenue and earning growth in the future. In addition to the huge
underwriting, advisory and transactional fees, interest and commitment charges CitiGroup was
receiving from Enron and related entities, in return for CS First Boston's participation in the scheme,
CS First Boston executives were rewarded by being permitted to invest at least $22.5 million in the
lucrative LJM2 partnership.
694. CS First Boston's relationships with Enron were so extensive that top executives of
the firm constantly interacted with top executives of Enron, i.e., Lay, Skilling, Causey, McMahon
or Fastow, on almost a daily basis throughout the Class Period, discussing Enron's business, financial
condition, financial plans, financing needs, partnerships, SPEs and Enron's future prospects. CS
First Boston actively engaged and participated in the fraudulent scheme and furthered Enron's
fraudulent course of conduct in several ways. It participated in loans of over $4 billion to Enron
during the Class Period. It helped Enron raise over $3 billion from the investing public via the sale
of new securities during the Class Period. It helped Enron structure and finance several of the illicit
SPEs and partnerships Enron controlled, which were primary vehicles utilized by Enron to falsify
its reported financial results, and engaged in transactions with Enron to disguise loans to Enron and
help Enron falsify its reported financial condition, liquidity and creditworthiness.
695. In interacting with Enron, CS First Boston functioned as a consolidated and unified
entity. There was no so-called "Chinese Wall" to seal off the CS First Boston securities analysts
from the information which CS First Boston obtained in rendering commercial and investment
banking services to Enron. Alternatively, even if some restrictions were placed on the information
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