Ex-Executives Say Sham Deal Helped Enron
NYtimes
For its role in the deal, Merrill Lynch received about $8 million from Enron, people close to the transaction said.

Securities law experts said the transaction, which involved a series of complex gas and power trades, may have violated securities laws by allowing Enron to manipulate its year-end profit statement.

"Not only could this be securities fraud, but you could have a looting of the stock plan," said John C. Coffee Jr., a professor of law at Columbia University. "This could have been a way of fabricating earnings to permit the executives to reap stock bonuses. That's rigging the scoring system."

At the time, moreover, Merrill Lynch's sales force was promoting Enron's stock and the bank's private equity group — touting Enron's stellar performance — was asking investors to contribute over $250 million to one of Enron's off-balance-sheet partnerships.