Posted on 07/23/2002 5:18:44 PM PDT by DeaconBenjamin
Citigroup and JP Morgan Chase shares went into free fall on Tuesday as congressional investigators showed how the two biggest US banks helped Enron disguise its debts through complex deals that hid their own involvement.
Investors took fright at the potential damage to the banks from their role in the energy trader's collapse, which has already brought down its auditor Andersen. Citigroup shares fell nearly 16 per cent on Tuesday with JP Morgan down 18 per cent, a combined loss of market value of over $34bn. Citigroup has lost a quarter of its value in two days.
Congressional investigators yesterday portrayed the banks as knowing participants in Enron's efforts to make its debts appear as trades through the use of "prepaid" energy contracts.
Senior executives from both banks defended their actions, telling the congressional inquiry that "prepay" transactions were legitimate financing structures used widely on Wall Street and any improper accounting was the fault of Enron and Andersen.
"During our business relationship with Enron, we thought we we re dealing with honest managers who had a legitimate business purpose for the transactions we did with them," said David Bushnell, managing director of Citigroup's global corporate and investment banking business. "Our employees did transactions that were common throughout Wall Street, and they believed those transactions were entirely appropriate."
Senator Carl Levin, chairman of the subcommittee on investigations, said the banks "knew what Enron was doing, assisted Enron in the deceptions, and profited from their actions".
Investigators insisted Citigroup and JP Morgan employees realised the deals were inappropriate, pointing to internal documents showing bankers attempting to keep the prepays secret. The documents also show the banks helped Enron make sure the trades could be accounted for as cash flow, rather than debt, a fact investigators said made them complicit in Enron's faulty financial statements.
Mr Levin is due to send his evidence to the Justice Department, which began a criminal investigation into financial fraud at Enron seven months ago.
The controversies have been a personal embarrassment for Sandy Weill, Citigroup's chairman and chief executive, who has been calling recently for corporate governance reforms. Mr Weill told Citigroup employees yesterday that the bank's share price had "decoupled" from its performance.
Analysts said the share price declines reflected fears the banks could face heavy fines or restrictions on their business activities. Tanya Azarchs, banking analyst at Standard & Poor's rating agency, said: "There is no way to quantify what the impact will be. Investors are assuming the worst."
Additional reporting by Jenny Wiggins in New York
They are Thieves and should be put in jail. We need to put politics aside and go after the ones who looted their company.
Now, we have Citigroup. Who loaned the money to Enron. And if my family wasn't heavily invested in Citigroup, I probably wouldn't be so passionate about it...but it hurts when it's this close to home.
Trading on C. should be suspended untill this is worked out. For everyone's sake.
Part of the error of your logic appears to be your perception of who Israel is. It seems scripture indicates all those whom God has given to become sons of the Living God is God's Israel. All those who seek His guidance and righteousness are His.
It doesn't take much looking around to find cases where those who seek a righteous existence are ridiculed, mocked, and even cursed. So, the flip side of "I will bless them that bless thee" is "and curse him that curseth thee"....
Regards,
Az
Excellent analogy but imagine this...a three headed snake who's intent is to accomplish some ill gotten gain.
First you need a corporation with top level executives that are basically corruptable, i.e. Enron. Second you need an overseer that will turn it's head and actually be an accomplice in the enterprise, i.e. A A. And last but not least, you need a financial institution that also is willing and capable of "inventing" shady ways to pull off the scam.
I'll let you guess who is the third head of the snake.
This third head of the snake is HUUUUUUGE...this could bring the whole house of cards down.
At the moment, we are doing what we can to hamstring Israel's efforts to defend itself. And, we are working toward a Pali state in Israel. As for the mercy thing, perhaps, you should direct that question to the ex-inhabitants of Sodom and Gommorah.
Nor do I but it sure sounds like Whitewater.
I LOVE that phrase!!!! Thanks for the visual.
LOL, I am often asked that! I am trying to be incognito you see!
A strong Euro is going to hurt them more than us.
Are you really that shallow? Read ALL of Paul's letter to the Galatians Ch 3, and esp. focus on v 7 and Vv 26-29.
"There are no conditions on whether or not God is for them. The Bible is clear that THEY are his chosen people. You may not believe that - but that's your problem."
I have no contention with whether Israel (Abraham's seed) are God's and that He is "for" them. You, my friend, have a problem in comprehending that, on God's turf, all who are sanctified by Christ ARE God's Israel. (Vv 28 & 29) That makes Him a "My God", and not merely a "Their God". Don't make the mistake of under-estimating that fact.
"And ... if you're going to quote scripture, please be sure you read the whole chapter where the scripture is - and you should know who is speaking and who they are speaking to. Otherwise, you will get your endtime doctrine out of whack."
Okay, so present scripture supporting your position. Let's see if you can determine "who is speaking and who they are speaking to" based on the short piece of scripture with which you've been presented. Until then, it's easily discernable by your interpretation as to who has their "endtime doctrine out of whack".
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