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

to make a reasonable and diligent investigation of the statements contained in the Offering
Memoranda to ensure that such statements were true and that there was no omission to state a
material fact required to be stated in order to make the statements contained therein not misleading.
These defendants, in the exercise of reasonable care, should have known of the misstatements and
omissions contained in the Offering Memoranda as set forth above. Each of these defendants knew
or should have known of the falsity of the Offering Memoranda because of its participation in the
fraudulent scheme and course of business as previously upheld by the Court.
1016.7 These defendants failed to make a reasonable investigation or possessed reasonable
grounds for the belief that the statements contained in the Offering Memoranda were true and did
not omit any material facts and were not misleading.
1016.8 Plaintiffs did not know, nor in the exercise of reasonable diligence could have known,
of the untruths and omissions contained in the Offering Memoranda at the time they acquired the
Foreign Debt Securities. Plaintiffs hereby tender their Foreign Debt Securities to defendants in
return for the consideration paid for them together with interest thereon.
1016.9 By reason of the conduct alleged herein, these defendants violated §§12(a)(2) and 15
of the 1933 Act. As a direct and proximate result of such violations, plaintiffs sustained substantial
damages in connection with their purchases of the Foreign Debt Securities.
FIFTH CLAIM FOR RELIEF
For Violation of TSA, Art. 581-33(A)(2)
(Against JP Morgan and Lehman Brothers)
1016.10 Plaintiff Washington Board repeats and realleges 1-991 as set forth above.
1016.11 This Claim is brought pursuant to the Texas Securities Act, Tex. Rev. Civ.
Stat., art. 581-33A(2), on behalf of plaintiff the Washington Board and all other States, political
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