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

2/99 27.6 million shares Enron common stock at $31.34
10/99 $100 million Enron "weather" bonds
Merrill Lynch's relationship with Enron was so extensive that Merrill Lynch underwrote the sale of
one-third of Enron's outstanding bond issues.
739. Merrill Lynch was also intimately involved in helping Enron structure Azurix –
Enron's purported worldwide water company – and knew that the primary reason Enron had
purchased Wessex Water for $2.3 billion was to create an entity, to be taken public, to "compensate"
Mark-Jusbasche for losing out in her power struggle with Skilling to become Enron's CEO, that
Enron had grossly overpaid for Wessex and that Enron's worldwide water business was very unlikely
to succeed, as it had been undertaken without a detailed feasibility study and even without a thorough
and well-thought out business plan. Merrill Lynch in 2/00 also acted as a lead underwriter for the
Azurix IPO of 38.5 million shares at $19 per share which raised $370 million in badly needed capital
for Enron and later as lead underwriter of over $440 million and £100 million in 10.375% and
10.75% Azurix senior notes reaping millions of dollars for Azurix.
740. In addition, during the Class Period, Merrill Lynch was intimately involved in
creating, structuring and helping to finance one of the primary vehicles of the Enron fraud – the
LJM2 partnership. The LJM2 partnership, was an indispensable element to allow the Enron Ponzi
scheme to continue in operation. Merrill Lynch, with the help of Vinson & Elkins, Andersen and
Enron insiders, created and structured the LJM2 partnership. Merrill Lynch acted as the placement
agent of the LJM2 partnership units to investors. It did so via a placement memorandum that made
clear that Enron would be the "source" of most, if not all, the deals to be done by LJM2, that LJM2's
day-to-day activities would be run by three top insiders of Enron, i.e., Fastow, Kopper and Glisan,
and that LJM2 would benefit from investment opportunities with Enron that "'would not be available
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