October 2, 1998
Enron bought Wessex, an English/Welsh water company. This was a fairly complex transaction involving a sub called Marlin which would later come under criticism. The basic structure was for Enron to set up two shell companies, Marlin Water Trust and Atlantic Water Trust. Marlin also co-owned Atlantic. Marlin would borrow a billion dollars from institutional investors. According to Smartest Guys and Conspiracy of Fools, Andy Fastow assured the investors that Enron would pay them back with Enron stock if Marlin felt short. The catch was a price trigger of the stock. If ENE stock fell below $37.84, Marlin debt holders could immediately demand repayment. In 2001, this price trigger would put added pressure on the already-falling stock and would have severe consequences.
October 2, 2001
Ever the family man, Andy Fastow had a two-hour luncheon with Lea. At 3:30 he left the office to take his young son to a birthday party. That evening he took the family to the San Francisco Giants/Houston Astros game at Enron Field; it was the make-up game from 9/11. The Giants beat the Astros.
In between a full day of meetings, Dr. Ken Lay sent an email to all Enron employees revealing the results of a “Lay It On The Line” survey that Dr. Lay had commissioned to discover the employee’s point of view about critical issues facing Enron. Four thousand people had completed the survey and believed the top five issues were:
-Stock Price
-The PRC
-Employee/Internal Morale
-External Reputation and Image
-”Walking the talk” of Integrity and Respect
October 2, 2002
The SEC filed a civil enforcement action in conjunction with a related Department of Justice criminal complaint against Enron CFO Andrew Fastow. The SEC complaint alleges the RADR, Chewco and Southampton transactions were improper and violated fraud and federal securities laws.
