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The U.S. Securities and Exchange Commission filed a civil complaint on Wednesday that alleges two former in-house lawyers at Houston-based Enron Corp. violated federal securities laws by misrepresenting and omitting material information from Enron’s public securities filings. The lawyers are Jordan H. Mintz, a former vice president and general counsel of Enron’s Global Finance group, and Rex R. Rogers, a former Enron vice president and associate general counsel. The SEC suit comes more than five years after Enron’s stock took a nosedive, and the formerly high-flying energy company filed for bankruptcy. The disclosures at issue in the SEC complaint pertain to reportable events in 2000 and 2001 related to Enron’s related-party transactions with partnerships controlled by former Enron Chief Financial Officer Andrew Fastow and to “undisclosed insider stock sales” by former Enron Chairman Kenneth Lay. The complaint, U.S. Securities and Exchange Commission v. Jordan H. Mintz, et al., filed in the Southern District of Texas, also alleges that Mintz “substantially participated” in a fraudulent related-party transaction that formed the basis of the related-party disclosure fraud. “Defendants, highly compensated Enron executives, participated in a scheme that had the effect of hiding the extent of Enron’s financial troubles from the public,” the SEC alleges in the complaint. Lawyers representing Mintz and Rogers say their clients will vigorously defend themselves from the allegations. Edwin Tomko, a partner in Dallas-based Curran Tomko Tarski who represents Rogers, said in a written statement: “Mr. Rogers is a person of great integrity and the highest moral character. He was never involved in any wrongdoing and we look forward to vigorously defending these baseless allegations.” Mintz’s attorney, Christopher Mead, a partner in London & Mead in Washington, D.C., said, “We tried to persuade the SEC that he was a good guy in this process, and, at least for now, they disagree.” The SEC brings several claims against Mintz and Rogers, including allegations that they violated Section 17(a) of the Securities Act of 1933 and several sections of the Securities Exchange Act of 1934 and Exchange Act rules. The SEC further alleges Mintz and Rogers aided and abetted violations of Exchange Act sections 13(a), 13(b)(2)(A), 10(b) and 14(a) by “knowingly or recklessly” providing assistance to Enron in its violations of securities laws. The SEC also claims Rogers violated Section 16(a) by providing substantial assistance to Lay when he violated securities laws that require officers of a public company to file periodic reports disclosing his stock sales. The SEC seeks disgorgement from Mintz and Rogers of unspecified “ill-gotten gains” and seeks unspecified civil penalties that would become part of the fund benefiting victims of the Enron collapse. The SEC also seeks to prohibit the two attorneys from ever acting as an officer or director of any public company required to file financial reports to the SEC. The SEC alleges in the complaint that Mintz knowingly or recklessly failed to disclose Enron’s buyback of an interest in Cuiaba, a Brazilian power plant, and that Mintz and Rogers failed to disclose in Enron’s 2000 proxy statement the fact that Fastow earned more than $18 million as a result of transactions between Enron and off-balance-sheet entities known as LJM1 and LJM2. The SEC also alleges Rogers failed to disclose in the 2000 proxy statement that Lay sold $16 million of Enron stock in 2000 to repay his Enron line of credit, and alleges he authorized Lay and others to defer the reporting in 2001 of the sales of an additional $70 million in Enron stock to repay the line of credit. As alleged in the complaint, Mintz directly or indirectly made, or caused to be made, materially false and/or misleading representations to Enron’s auditor, Arthur Andersen, about the LJM partnerships. Mintz, 50, is now vice president and chief tax officer at Kinder Morgan Inc. in Houston, and Rogers, 58, is retired. This article originally appeared in Texas Lawyer, a publication of ALM.

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