Two CSFB Bankers Were on Board of Enron Partnership
NEW YORK — Wall Street firm CS First Boston, a unit of Swiss bank Credit Suisse Group Inc., said Friday that two of its bankers were directors of one of the complex off-balance-sheet vehicles energy trader Enron Corp. used before its collapse.
Enron allegedly used thousands of these intricate, special-purpose vehicles to shift debt off its balance sheet, mask growing losses and artificially inflate profits. The energy trader filed for bankruptcy protection in December.
The bankers sat on the board of the entity, Atlantic Water Trust, for a short period of time at Enron’s request and in keeping with their fiduciary responsibility, a fact that was fully disclosed to investors and in documents filed with the Securities and Exchange Commission, a CS First Boston spokeswoman in New York said.
The Wall Street Journal first reported the story Friday.
Major Wall Street firms are under fire for services they provided to Enron, such as lending it money, helping it with mergers and acquisition deals and touting its shares to investors. In their defense, Enron was one of the biggest companies in the United States before its bankruptcy filing.
The bankers, Laurence Nath and Dominic Capolongo, joined the Atlantic Water Trust board around November 2000 and left it 10 months later, a source familiar with the matter said.
Atlantic Water was part of a complex web of Enron entities involving water companies. It was jointly owned by Enron and another vehicle called Marlin, which owned British water company Wessex Water, originally purchased by Enron.
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