A jury convicted four former Merrill Lynch (MER) executives and a former Enron employee of conspiracy and fraud in the first criminal trial involving employees of Wall Street and the once-beleaguered company.
reported Wednesday that the group was convicted of conspiracy and two counts of wire fraud resulting from a scam sale of interest in power plants mounted on barges to the brokerage at the end of 1999 so Enron could appear to have met earnings targets.
Among those convicted was Merrill's former head of investment banking, Daniel Bayly. The others were James A. Brown, former head of Merrill's asset lease and finance group; William Fuhs, a vice president who reported to Brown; Robert S. Furst, a former manager of Merrill's relationship with Enron; and Dan O. Boyle, a former Enron finance executive.
A sixth defendant, a former in-house Enron accountant, was acquitted. Sheila Kahanek testified she consistently opposed a verbal promise that the government contended made the deal a loan -- that Enron would resell or buy back Merrill's interest within six months.
Although the government didn't contend that the barge deal was one of the allegedly illegal acts that shoved Enron into bankruptcy in 2001 in the wake of a huge accounting scale, prosecutors said the scam was an example of the schemes used by the company to pump up its appearance of financial success.
The verdict came after 21 hours of deliberations that began at the close of six weeks of testimony.