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Ex-Enron employees face fresh SEC fraud charges
2006-10-13
U.S. securities regulators on Friday charged three former Enron employees with fraud related to their roles in the scandal that destroyed the company and rocked financial markets. Jerry Castleman, Cheryl Lipshutz and Kathleen Lynn "knew or were reckless in not knowing of the existence of the side agreement" between Enron and LJM Cayman, LP (LJM1) -- a related entity that was controlled by the now convicted former Enron Chief Financial Officer Andrew Fastow, the U.S. Securities and Exchange Commission said in a statement. Lipshutz agreed to pay $52,150 to settle the charges, while the cases against the other two are pending. She did not admit or deny the allegations, as is customary in such SEC settlements. Castleman's attorney said his client is "working toward resolving the charges," while Lynn's said he had not yet read the complaint. An attorney for Lipshutz was not immediately available for comment. In the LJM1 deal, the SEC said Enron sold an interest in a Brazilian power project to Fastow's company with an oral side agreement that LJM1 would not lose any money. As a result of the side agreement, the revenue that Enron recognized in connection with the project in 1999, 2000 and 2001 should not have been booked, the SEC said. The SEC also noted that "Enron paid LJM1 a profit despite the poor economics of the project." Muzi.com News
Skilling faces decades in prison (2006-10-23)Enron's Skilling gets 24 years (2006-10-23)Ex-Enron employees face fresh SEC fraud charges (2006-10-13)Corporate criminals Ebbers, Fastow pay stiff price (2006-09-26)Enron's penitent Fastow faces sentencing (2006-09-26)
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