Court Documents Newsroom Settlement Q & A The Law Firm Contact Info

Notice:

Under Department of Justice guidelines and regulations, members of the Newby shareholders' class-action lawsuit are to be notified of Enron-related court proceedings, including the following events that have or will occur in the near future:

For Class Members
Newsroom

Enron in the News
  • UC Begins Distributing Enron Settlement to Victimized Investors, 12/18/08
  • Billions to be Shared by Enron Shareholders, 09/09/08
  • Enron Payout Plan Approved, 09/09/08
  • Filing Argues a Duty to Tell, 03/29/08
more...
Press Releases
  • UC Begins Distributing Enron Settlement to Victimized Investors, 12/18/08
  • UC Reaches $11.5 Million Settlement with Goldman Sachs in Enron Securities Lawsuit, 02/05/08
  • Enron Victims Comment on Stoneridge, 10/09/07
  • Frank and Conyers File Amicus Brief in Stoneridge Case, 07/30/07
more...
Multimedia
  • Stoneridge and Enron - An Interview with Patrick Coughlin from Bloomberg TV, 10/08/07
  • Investors vs. Wall Street, 10/08/07
  • Enron Victims Seek SEC Support, 08/09/07
  • Sue the Banks, 06/22/07
  • CNBC, Keeping America Great, 06/12/07


 
United States v. Daniel Bayly et al. 08-2003 8, 20039, 20040 (5th Cir.) The January 28, 2008 trial date of former Merrill Lynch executives Daniel Bayly and Robert S. Furst (James A. Brown was scheduled for a separate retrial) was vacated by Judge Werlein on January 23, 2008 because of the pending appeals filed by the three defendants with the U.S. Court of Appeals for the Fifth Circuit. These appeals are still pending, and their reply briefs were due July 10, 2008.

United States v. Kevin Howard On June 1, 2009, defendant Kevin Howard, entered a guilty plea to one count of falsifying Enron's books and records. Pursuant to the terms of the plea agreement, Howard faces a maximum sentence of up to twelve months of home detention at sentencing. A sentencing hearing is scheduled for November 2, 2009 at 9:30 a.m. before Judge Vanessa D. Gilmore in Courtroom 9A, United States Courthouse, located at 515 Rusk Avenue, Houston, Texas.

United States v. Scott Yeager Oral Argument in this case is scheduled for March 23, 2009 at 10:00 a.m., but seating is limited and on a first come, first seated basis. Seating for the argument will begin at 9:30 a.m., and persons who wish to attend the argument will need to line up on the Front Plaza in front of the Supreme Court Building, located at 1st and East Capitol Sts., NE, Washington, DC. The issue before the Court is whether, under the collateral estoppel component of the Double Jeopardy Clause, the jury's verdict that Scott Yeager was not guilty on some counts at the first trial bars the government from retrying Yeager on other counts on which the jury was unable to reach a verdict.

United States v. Joseph Hirko and Rex Shelby Joseph Hirko has pleaded guilty to Count 4 of the Seventh Superceding Indictment, charging him with wire fraud, in violation of Title 18, United States Code, Section 1343, and will be sentenced on September 28, 2009 at 9:30 a.m. Rex Shelby's trial was scheduled for February 2, 2009; however, the defense has requested a continuance pending the resolution of defendant Scott Yeager's appeal before the United States Supreme Court. The government opposed the request for continuance and the matter is currently before Judge Gilmore.

Updated information on these events and other future court proceedings in Enron-related cases is available on the Criminal Division's Victim Witness webpage at:
http://www.usdoj.gov/criminal/vns/index.html.

  Background on the Enron Victims' Lawsuit to Recover Damages from Wall Street Banks that Orchestrated the Enron Fraud

Background of the Banks’ Role in the Enron Debacle

  • As a result of the massive fraud at Enron, shareholders lost tens of billions of dollars. Many Enron executives, Enron’s accounting firm and certain bank officials were indicted.

  • Andrew Fastow, Enron’s now-imprisoned former finance chief, testified that many of the banks’ transactions were contrived, deceptive deals done solely to create the false appearance of profits and cash flow.

  • Internal Enron documents and testimony of bank employees detailed how the banks engineered sham transactions to keep billions of dollars of debt off Enron’s balance sheet and create the illusion of increasing earnings and operating cash flow. For example:

    • Merrill Lynch purchased Nigerian barges from Enron on the last day of 1999 only because Enron secretly promised to buy the barges back within six months, guaranteeing Merrill Lynch a profit of more than 20%. As a result of this fraud, Merrill Lynch ultimately paid $80 million to settle with the SEC.

    • Barclays entered into several sham transactions with Enron, including creating a “special purpose entity” called Colonnade, a shell company to hide Enron’s debt, named after the street in London where the bank is headquartered.

    • Credit Suisse First Boston engaged in “pre-pay” transactions with Enron, including serving as one of the stop-offs for a series of round-trip, risk-free commodities deals in which commodities were never actually transferred or delivered.

  • Although three banks (and others) have settled with the victims for $7.2 billion, several huge banks still named in this suit have not paid a penny to the victims of the fraud.


The Fifth Circuit’s Decision

  • After years of preparation and just a few weeks before trial, the Fifth Circuit Court of Appeals vacated the class certification order.

  • Although the 2-to-1 decision of the Fifth Circuit acknowledged that the banks’ conduct was “hardly praiseworthy,” it ruled that because the banks themselves did not make any false “statements” about their conduct, they could not be liable to the victims even if they knowingly participated in the scheme to defraud Enron’s shareholders.

  • As the Court's dissenting Judge summarized, the ruling “immunizes a broad array of undeniably fraudulent conduct from civil liability . . . effectively giving secondary actors license to scheme with impunity, as long as they keep quiet.”

  • In an extraordinary admission, the Court's two-member majority acknowledged that their ruling runs afoul of “justice and fair play” (“We recognize, however, that our ruling . . . may not coincide, particularly in the minds of aggrieved former Enron shareholders who have lost billions of dollars in a fraud they allege was aided and abetted by the defendants at bar, with notions of justice and fair play.”)

For more background on the Enron lawsuit: www.universityofcalifornia.edu/news/enron

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