Parker & Waichman, LLP announces that it has been retained by additional plaintiffs and that they will soon file a new round of claims against Merrill Lynch on behalf of current and former Enron Corporation shareholders. These plaintiffs purchased shares of Enron as a result of misleading research and advice from Merrill Lynch analysts and brokers. To date, Parker & Waichman, LLP and associated counsel have been retained by hundreds of individuals financially injured by the inappropriate advice of Merrill Lynch. Current and former Enron shareholders are encouraged to visit www.enronstockfraud.com for more information.
The claims will charge that Merrill Lynch inappropriately advised clients to purchase shares of Enron by not disclosing a conflict of interest between its research and investment banking divisions. In 1998, Merrill Lynch, concerned about being excluded from a large Enron stock offering, replaced John Olson, Merrill Lynch’s top energy analyst who was not positive with respect to Enron’s stock, with Donato Eassey, who was bullish on Enron. Merrill Lynch was specifically rewarded for the analyst switch with tens of millions of dollars in Enron investment banking business.
Additionally, earlier this year, the Securities and Exchange Commission charged four former executives of Merrill Lynch with helping Enron inflate profits and mislead investors with two financing deals. The SEC named Thomas W. Davis, former Merrill Lynch vice chairman; Schuyler Tilney, an investment-banking managing director who directly oversaw corporate finance matters related to Enron; Robert Furst, a managing director in the investment banking division; and Daniel Bayly, the global head of the division who later became the firm’s chairman of investment banking.
In a civil lawsuit filed earlier this year, the SEC alleged that the four former Merrill executives “aided and abetted Enron Corp.’s earnings manipulation” by working with Enron executives to set up fraudulent transactions. One of the deals involved Merrill Lynch’s purchase from Enron of three energy-generating Nigerian barges; the other was an energy trade between Merrill Lynch and Enron. In a complaint filed against Enron executives, the Justice Department called the Nigerian barge deal a “sham transaction” that helped Enron “manufacture earnings.”
Additionally Merrill Lynch helped set up and fund LJM, LP and LJM2, LP, two companies controlled by former Enron CFO Andrew Fastow, which Enron used to generate artificial profits and conceal its true debt by moving billions of dollars of debt off its balance sheet and onto the balance sheets of LJM2. Although Merrill Lynch allegedly knew that Enron was deceiving investors by hiding debt, Merrill Lynch never disclosed this information to the public, and maintained a false and misleading “Buy” recommendation on Enron’s stock at all times.
These complaints will charge that Enron and Merrill Lynch violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated there under, by issuing a series of materially false and misleading statements. Additionally these complaints will charge Merrill Lynch with violations of Section 15(c) of the Securities Exchange Act of 1934, as well as various state statutes, for issuing fraudulent research reports and for violating NYSE Rules 401, 472 and 476(a)(6), and NASD Rules 2110 and 2210, for issuing research reports that were not based on principles of fair dealing and good faith, did not provide a sound basis for evaluating facts, contained exaggerated or unwarranted claims about the covered companies, and/or contained opinions for which there were no reasonable basis.
Parker & Waichman, LLP and associated counsel currently represent hundreds of victims of stock fraud and continues to aggressively file claims against fraudulent public companies and investment banks. Parker & Waichman, LLP has established a website specifically devoted to current and former shareholders and employees that have been adversely affected by the inappropriate conduct of Enron and Merrill Lynch. It is located at http://www.enronstockfraud.com/. For more information on Parker & Waichman, LLP, please visit our site at https://www.yourlawyer.com or call 1-800-YOURLAWYER.