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Kristina Mordaunt, once an Enron in-house lawyer popular with the company’s most powerful executives, left the corporate headquarters for the last time in November in a humiliating fashion. On Nov. 7, 2001, one day before the company filed a document with the Securities and Exchange Commission that reduced its earnings for the previous four years by $552 million because of alleged accounting errors involving affiliates, Mordaunt was fired, according to the SEC. And other Enron in-house lawyers say security escorted her from the building. The SEC filing stated that the company believed that Mordaunt, former general counsel of Enron Broadband Services Inc., and other Enron employees allegedly had invested in affiliates created by Enron to buy and sell the company’s assets. The transactions were related to partnerships set up and controlled by one-time Enron chief financial officer Andrew S. Fastow, the filing noted. Fastow made more than $30 million from his role in the Enron affiliates’ and related deals that had triggered the massive restatement of earnings, the SEC filing said. Mordaunt has hired R. Hayden Burns, a partner in Houston’s Burns, Wooley, Marseglia & Zabel. Burns did not return calls for this story by press time. Mordaunt’s alleged investment in the partnerships apparently was unknown to Enron general counsel James V. Derrick Jr. According to one Enron in-house lawyer who does not want to be identified, Mordaunt allegedly went to Derrick before she was fired and told him about her investment. Bracewell & Patterson partner J. Clifford Gunter III, a lawyer defending Derrick in securities litigation filed in federal court in Houston, confirms that Mordaunt went to Derrick and says his client simply told her, “Thank you for that information, and please report that to the Wilmer Cutler lawyers.” On Oct. 31, Enron’s board hired Wilmer, Cutler & Pickering to conduct a still-unreleased review of the Fastow-related partnerships and those entities’ deals with Enron. Wilmer Cutler did not return phone calls seeking comment by press time.

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