More than five years after Enron Corp. collapsed into bankruptcy, the Securities and Exchange Commission (SEC) Wednesday charged Jordan Mintz and Rex Rogers, two former in-house lawyers, with participating in various fraudulent schemes. Mintz, 50, is currently the chief tax officer at energy company Kinder Morgan Corp, while Rogers, 58, a former SEC lawyer, is retired.
According to the 45-page civil action filed in U.S. District Court for the Southern District of Texas (No. 07-1027), Rogers, who was a former associate general counsel, failed to properly or fully disclose to investors that former Chairman Kenneth Lay sold more than $86 million in Enron stock back to the company in 2000 and 2001 to repay company loans.
Mintz, the former general counsel for Enron’s finance group, is charged with participating in the Cuiaba transaction, in which Enron repurchased a poorly performing Brazilian power plant from the LJM partnership run by ex-CFO Andrew Fastow.
“We’re bringing a case against lawyers who are traditionally viewed as gatekeepers,” said the SEC’s Frederic Firestone, who is in charge of the case. “Unfortunately, they used their expertise to further aid and abet Enron’s massive fraud.”
Among other things, the SEC complaint alleges that Rogers oversaw the content of Enron’s SEC filings. Last year, Lay testified in his fraud and conspiracy trial that he relied on Rogers’ advice. Six weeks after a jury found him guilty on multiple fraud and conspiracy charges, Lay died in July (see Daily GPI, July 6, 2006).
Mintz testified during congressional hearings in 2002, and he said then that he had challenged Fastow’s LJM partnerships (see Daily GPI, Feb. 5, 2002). He also told Congress that he questioned the conflicts in Fastow being allowed to run company partnerships and also act as CFO.
Christopher Mead, who is defending Mintz, said his client “denies the charges and intends to fight vigorously in court.” Rogers’ attorney Ed Tomko said his client “was never involved in any wrongdoing, and we look forward to vigorously defending these baseless allegations.”
The SEC is seeking permanent injunctions, disgorgement with prejudgment interest and civil money penalties from both defendants, as well as an order barring them from serving as an officer or director in a publicly traded company.
The SEC complaint may be viewed here. The agency said its investigation is continuing.
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