WASHINGTON, March 28 (UPI) -- The U.S. Securities and Exchange Commission has charged two former in-house Enron Corp. lawyers with securities fraud, the agency said Wednesday.
Former global finance general counsel Jordan Mintz and former associate general counsel Rex Rogers were charged in connection with a fraudulent scheme involving a bogus sale of part of a power project, the SEC said.
Attorneys for Mintz and Rogers could not immediately be reached for comment.
The case involves Enron's 1999 ostensible sale of its interest in a troubled power project in Cuiaba, Brazil, to a partnership, known as LJM1, controlled by former Enron Chief Financial Officer Andrew Fastow, the SEC said.
The transaction was done to take the asset off Enron's balance sheet and to show earnings, the SEC alleged.
But the sale was not legitimate because Enron "did not transfer ... the usual risks and rewards of ownership," the SEC said.
It included a spoken understanding LJM1 would not lose money, the SEC said.
Enron then bought back LJM1's Cuiaba interest in 2001, paying LJM1 a profit even though the investment had decreased in value.
The SEC charges that Mintz knew, or was reckless in not knowing, of the spoken understanding and that both men made false statements about it on proxy statements.
