Message-ID: <3364915.1075858864479.JavaMail.evans@thyme> Date: Fri, 19 Oct 2001 10:42:31 -0700 (PDT) From: m..schmidt@enron.com To: karen.denne@enron.com, pr <.palmer@enron.com>, vance.meyer@enron.com, meredith.philipp@enron.com, leslie.hiltabrand@enron.com, j..kean@enron.com Subject: =DJ Enron Dn -2:WSJ Articles Cited CFO Conflict Of Interest Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Schmidt, Ann M. X-To: Denne, Karen , Palmer, Mark A. (PR) , Meyer, Vance , Philipp, Meredith , Hiltabrand, Leslie , Kean, Steven J. X-cc: X-bcc: X-Folder: \SKEAN (Non-Privileged)\Kean, Steven J.\Deleted Items X-Origin: Kean-S X-FileName: SKEAN (Non-Privileged).pst =DJ Enron Dn -2:WSJ Articles Cited CFO Conflict Of Interest 2001-10-19 13:30 (New York) By Tom Locke Of DOW JONES NEWSWIRES DENVER (Dow Jones)--Enron Corp. (ENE) shares fell 11.6% Friday, the third daily drop in a row after negative articles appeared in The Wall Street Journal Wednesday, Thursday and Friday. The articles dealt largely with financial dealings between Enron's chief financial officer, Andrew Fastow, losses incurred by Enron, and conflict-of-interest charges against Fastow. On Tuesday the Houston energy trader reported a third-quarter charge of $1.01 billion, mostly tied to write-downs of business investments that had turned out badly. Banc Of America Securities analyst William Maze said that much of the information in The Journal articles was "rehashing things that were out there." But he said a number of investors came into the Enron stock in the third quarter, were not overly familiar with the company, and have been jumping out of the stock in the last three days because of the negative headlines. Maze also said Enron could have better handled distribution of the information regarding the $1.2 billion shareholders' equity writedown that The Journal reported Thursday. That Thursday article said that the equity reduction was not reported in Enron's earnings release issued Tuesday but was mentioned briefly in a subsequent call with analysts. The article also said that $35 million of the $1.01 billion charge to earnings was tied to transactions with a limited partnership, LJM2 Co-Investment LP, created by Fastow, the chief financial officer. Friday, The Journal reported that LJM2 realized millions in profits from its transactions with Enron and benefitted from renegotiating terms of existing deals. Enron shares were recently down Friday $3.33, or 11.5%, at $25.67. They dropped from a closing price of $33.84 on Tuesday to $32.20 on Wednesday and 29 on Thursday before the Friday decline.