UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION, :
:
Plaintiff, : Civil Action No. H-02-3127
:
v. : COMPLAINT
:
MICHAEL J. KOPPER, :
Defendant.
Plaintiff Securities and Exchange Commission (the "Commission") for its Complaint
alleges as follows:
SUMMARY
1. The defendant Michael J. Kopper, a former employee of Enron Corp., engaged, along
with others, in a self-enriching scheme to defraud Enron's security holders through the
use of certain off-balance-sheet entities.
2. By his conduct, Kopper, directly and indirectly, engaged in acts, practices, and courses
of business that violated, and unless enjoined may again violate, Section 10(b) of the
Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5].
3. The Commission requests that this Court permanently enjoin Kopper from violating
the foregoing federal securities laws, prohibit him permanently and unconditionally from
acting as an officer or director of any issuer of securities that has a class of securities
registeredpursuant to Section 12 of the Exchange Act or that is required to file reports
pursuant to Section 15(d) of such Act, order him to disgorge gains from the violations,
and order such other and further relief as the Court may deem appropriate.
JURISDICTION AND VENUE
4. The Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), and 27 of
the Exchange Act [15 U.S.C. §§ 78u(d) and (e) and 78aa].
5. Venue lies in this District pursuant to Section 27 of the Exchange Act [15 U.S.C.
SNIPPETS:
Plaintiff Securities and Exchange Commission for its Complaint alleges as follows:
The defendant Michael J. Kopper, a former employee of Enron Corp., engaged, along with
By his conduct, Kopper, directly and indirectly, engaged in acts, practices, and courses of
The Commission requests that this Court permanently enjoin Kopper from violating the
eem appropriate.
Venue lies in this District pursuant to Section 27 of the Exchange Act because certain acts
In connection with the acts, practices, and courses of business alleged herein, Kopper,
Kopper held various positions at Enron from approximately 1994 through July 2001.
In late July 2001, Kopper left Enron to run LJM2 Co-Investments LP, an affiliate of entities
Among other businesses, Enron was engaged in the purchase and sale of natural gas,
These joint investments typically were structured as separate, special purpose entities to
Under applicable accounting rules, an SPE could receive off-balance-sheet treatment only if
Starting in at least early 1997, Kopper and others devised a scheme to defraud Enron's
Enron's CFO and Kopper caused the creation of SPEs known as "RADR ZWS, LLC," and "RADR ZWS
Rather than seek independent third party equity investors, and to insure that Enron
The Enron CFO arranged to fund some of the friends' "investments" by making an unsecured
The repurchase price would increase over time, so that the longer it took Enron to repurchase
Enron and the California Public Employees' Retirement System entered into a joint venture
Enron was the general partner of JEDI and contributed $250 million in Enron stock; CALPERS
In November 1997, Enron formed Chewco, an SPE, to buy out CALPERS' JEDI interest.
After failing to find investors willing to provide the required 3-percent outside equity for
Its permanent financing structure consisted of a $240 million loan from Barclays guaranteed
Still another SPE formed by Enron was a partnership called LJM Cayman,
Enron's CFO invested $1 million in LJM Cayman and was granted by Enron a limited waiver of
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