The Securities and Exchange Commission has charged two former in-house lawyers at Enron Corp. with securities fraud over a Brazilian scheme to move losses off the company’s balance sheet.
Jordan Mintz, former general counsel of Enron's global finance group, and Rex Rogers, former associate general counsel, were charged in connection with a fraudulent scheme to make material misrepresentations or omissions in Enron's public filings, the SEC said.
The case involves Enron's 1999 sale of an interest in a troubled power project in Brazil to a partnership controlled by former Enron chief financial officer Andrew Fastow. Enron later bought back an interest in the project under an oral agreement, allowing the front company to show a profit even though the investment had decreased in value.
The SEC charges that Mintz knew, or was reckless in not knowing, of the oral agreement and directed the documenting and closing of the buyback. The commission also accused the men with knowingly or recklessly failing to accurately disclose the buyback and related details in Enron's regulatory filings.
The SEC is seeking permanent injunctions, disgorgement and civil monetary penalties from both lawyers, as well as the right to bar them from serving as officers or directors for a public company.
