Why is Enron Creditors Recovery Corp. suing Citigroup?
Enron Creditors Recovery Corp. (“ECRC”) alleges that Citigroup (and some of its subsidiaries and affiliates) knowingly played a key role in assisting certain Enron officers in manipulating and misstating Enron’s financial condition beginning in 1997 and continuing through Enron’s bankruptcy in December 2001, thereby defrauding Enron’s innocent creditors and shareholders. Specifically, during this period, ECRC alleges Citigroup entered into at least 13 structured finance transactions with Enron, knowing that Enron’s intended accounting for them was misleading and would give Enron’s investors, analysts and credit rating agencies the erroneous impression that Enron was a financially strong and growing company. The Examiner concluded that all of the transactions between Enron and Citigroup share one or more of the following characteristics: • No rational business purpose. • Completion near the close of Enron’s financial reporting period and in an amount designed to assist Enron in meeting
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