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Former Merrill Lynch execs to face fraud charges in Enron deal
Houston, Sept 17: Three former Merrill Lynch & Co. executives are expected to be named in an indictment to be unsealed today on charges they helped Enron Corp. artificially inflate its earnings with a loan that was wrongly booked as a sale, people familiar with the case said.
The three are charged with fraud in a scheme in which
Enron, with Merrill's knowledge, wrongly booked a short-term
investment from the brokerage firm as profit from the sale of
Nigerian barges. The income was then used to make Enron
appear to have met earnings targets.
Bayly and Furst, are among four facing similar
allegations in a civil complaint filed in March by the
Securities and Exchange Commission. The third defendant is
not charged by the sec, which also named Merrill Lynch.
Bayly, former global head and chairman of investment
banking, retired from Merrill last year. Furst, former
managing director in investment banking, quit in 2001. Their
lawyers either declined comment or didn't return calls for
comment.
The criminal charges do not involve Merrill Lynch,
which settled the SEC civil complaint for USD80 million in
March.
Bureau Report