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Report: Energy trades a sham

Thursday, Aug. 8, 2002 | 10:46 a.m.

HOUSTON -- Enron Corp. and its banker, financial services giant Merrill Lynch & Co. Inc., hastily contrived a complex deal of energy trades that enabled Enron to meet profit expectations in late 1999, triggered significant bonuses for Enron executives and earned Merrill Lynch $8 million from its client, according to a published report.

"This was absolutely a sham transaction, and it was an 11th-hour deal," one unidentified former Enron executive who knew of the deal told The New York Times for a story published today.

The newspaper said details of the deal were confirmed by five other former executives of the Houston energy trading company, now in federal bankruptcy proceedings in New York. It said none of the people would be quoted by name.

One former Enron executive who worked on the transaction disputed the deal was a sham, the newspaper reported. New York-based Merrill Lynch denied any wrongdoing, calling the transactions legitimate.

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