UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
SETH ABRAMS and STEVEN FRANK, 8 Civil Action No. H-01-3630
Individually and On Behalf of All Others
Similarly Situated, 6 CLASS ACTION
Plaintiffs, 8
vs.
t
ENRON CORP., KENNETH L. LAY, 0
JEFFREY K. SKILLING, ANDREW S. 4
FASTOW, RRZHARD A. CAUSEY, JAMES V. $
DERRICK, JR., J. CLIFFORD BAXTER, 8
MARK A. FREVERT, STANLEY C.
HORTON, KENNETH D. RICE, RICHARD B. $
BUY and ARTHUR ANDERSEN, LLP, D
Defendants. 4 DEMAND FOR JURY TRIAL
AMENDED CLASS ACTION COMPLAINT FOR
VIOLATIONS OF THE FEDERAL SECURITIES LAWS
NATURE OF THE ACTION
1. This is a securities fraud class action on behalf of purchasers of
of Enron Corp. ("Enron" or the "Company") between October 19, 1998 and November 7, 2001
inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange
1934 (the "Exchange Act"). Defendants are Enron, certain of its officers and directors and
auditors.
2. Enron is engaged in the businesses of natural gas, electricity and
wholesale and retail customers. During the Class Period, defendants issued favorable but
financial statements and made false and misleading statements about the Company's business. As
a result of these false statements, the Company's stock traded as high as $90.75.' Defendants
advantage of this artificial inflation, selling 7.3 million shares of their Enron stock
$434 million.
3. It was subsequently revealed that the Company would be incurring losses
for certain of its divisions. Then, on November 8, 2001, prior to the markets opening,
announced it was restating its results for 1997, 1998, 1999 and 2000, and the first two
200 1 to correct for errors which had inflated Enron's net income by $59 1 million in those
that audit reports for those years should not be relied upon. The impact of the
enormous:
1999
SNIPPETS:
FASTOW, RRZHARD A. CAUSEY, JAMES V. $
This is a securities fraud class action on behalf of purchasers of the common stock of Enron
Enron is engaged in the businesses of natural gas, electricity and communications to
During the Class Period, defendants issued favorable but false financial statements and made
Defendants took advantage of this artificial inflation, selling 7.3 million shares of their
Skilling also served as the Company's President and Chief Operating Officer until February
During the Class Period, while Enron was making false statements and issuing false financial
Because of the Individual Defendants' positions with the Company, they had access to the
rovided to them in connection therewith.
defendants had been informed by at least one employee that the accounting for the
Analysts attributed the price rise to, among other things, interest and expectations for
28 Further exacerbating the problems at the Broadband Services Division, Enron had agreed to
The aim of the transaction was to provide hedges against fluctuating values in some of
This Balance Sheet represented that Enron had debt of only $6.254 billion and shareholders'
and SEC rules, as described in 719 1- 104,109-l 10 and 1 I 5-l 16, due to Enron's failure to
In fact, this Form 10-Q was false and misleading and prepared in violation of GAAP and SEC
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