LJM (company): Difference between revisions

Content deleted Content added

Inline

Revision as of 01:16, 21 March 2007

LJM, which stands for Leah, Jeffery, Michael, (the names of Andy Fastow's wife and children) was a company created in 1998 by Enron's "financial wizard", Andrew Fastow to buy poorly performing Enron stock.

On 18 June, 1999 Fastow discussed with Kenneth Lay and Jeffery Skilling a proposal to establish a partnership named LJM Cayman L.P. (LJM). Fastow told Lay and Skilling that he would serve as the general partner and seek investments from outside investors. At a board meeting on 28 June, 1999 Lay called on Skilling, who in turn called on Fastow to present the proposal. Fastow announced that he would serve as the general partner and he would invest $1 million. After discussing the matter, the Board drafted and adopted a resolution that approved the creation and transactions with LJM.

When the proposal was showed to Arthur Andersen, Enron's accounting firm, they did not approve of LJM, but since it was already earning tens of millions of dollars a year from Enron, it decided to keep its client happy and back LJM.

LJM was officially formed in June of 1999 and Fastow became the general partner of LJM Partners, LLC, which was the general partner of LJM Partners, L.P., which in turn was the general partner of LJM Cayman L.P. Fastow raised $15 million from two limited partners ERNB Ltd. and Campsie Ltd.

In reality, LJM was used to hide debt and inflate profits for Enron in order to boost its stock price.^{[citation needed]} LJM entered in a total of three transactions with Enron; the first was in an effort to hedge Enron's position in Rhythms NetConnections stock, the second was the purchase of a portion of Enron's interest in a Brazilian Power Project (Cuiaba), and the third was a purchase of certificates of an SPE trust called "Osprey Trust." The first two of these transactions raised issues of significant concern in the later investigation. It is also believed that the creation of LJM was the beginning of the complex and questionable accounting practices that lead to Enron's demise.

References

This corporation or company article is a stub. You can help Wikipedia by expanding it.

@@ Line 1: / Line 1: @@
 {{More sources|date=March 2007}}
 {{Citations missing|date=March 2007}}
-'''LJM''' which stands for '''Leah, Jeffery, Michael''' (the names of Andy Fastow's wife and children) was a company created in 1998 by [[Enron]]'s "financial wizard", [[Andrew Fastow]] to buy poorly performing Enron stock.
+'''LJM''', which stands for '''Leah, Jeffery, Michael''', (the names of Andy Fastow's wife and children) was a company created in 1998 by [[Enron]]'s "financial wizard", [[Andrew Fastow]] to buy poorly performing Enron stock.
-On [[18 June]], [[1999]] Fastow disscused with [[Kenneth Lay]] and [[Jeffery Skilling]] a proposal to establish a partnership named LJM Cayman L.P. (LJM). Fastow told Lay and Skilling that he woud serve as the general partner and seek investments from outside investors. At a board meeting on [[28 June]], [[1999]] Lay called on Skilling, who in turn called on Fastow to present the proposal. Fastow announced that he would serve as the general partner and he would invest $1 million. After discussing the matter the Board drafted and adopted a resolution that approved the creation and transactions with LJM.
+On [[18 June]], [[1999]] Fastow discussed with [[Kenneth Lay]] and [[Jeffery Skilling]] a proposal to establish a partnership named LJM Cayman L.P. (LJM). Fastow told Lay and Skilling that he would serve as the general partner and seek investments from outside investors. At a board meeting on [[28 June]], [[1999]] Lay called on Skilling, who in turn called on Fastow to present the proposal. Fastow announced that he would serve as the general partner and he would invest $1 million. After discussing the matter, the Board drafted and adopted a resolution that approved the creation and transactions with LJM.
-When the proposal was showed to [[Arthur Andersen]], Enron's accounting firm, they did not approve of LJM, but since it was already earning tens of millions of dollars a year from Enron it decided to keep its client happy and back LJM.
+When the proposal was showed to [[Arthur Andersen]], Enron's accounting firm, they did not approve of LJM, but since it was already earning tens of millions of dollars a year from Enron, it decided to keep its client happy and back LJM.
-LJM was officially formed in June, 1999 and Fastow became the general partner of LJM Partners, LLC, which was the general partner of LJM Partners, L.P., which in turn was the general partner of LJM Cayman L.P. Fastow raised $15 million from two limited partners ERNB Ltd. and Campsie Ltd.
+LJM was officially formed in June of 1999 and Fastow became the general partner of LJM Partners, LLC, which was the general partner of LJM Partners, L.P., which in turn was the general partner of LJM Cayman L.P. Fastow raised $15 million from two limited partners ERNB Ltd. and Campsie Ltd.
-In reality, LJM was used to hide debt and inflate profits for Enron in order to boost its stock price.{{Fact|date=March 2007}} LJM entered in a total of three transactions with Enron, the first was in an effort to hedge Enron's position in Rhythms NetConnections stock, the second was the purchase of a portion of Enron's interest in a Brazilian Power Project (Cuiaba) and the third was a purchase of certificates of an SPE trust called "Osprey Trust". The first two of these transactions raised issues of significant concern in the later investigation. It is also believed that the creation of LJM was the beginning of the complex and questionable accounting practices that lead to Enron's demise.
+In reality, LJM was used to hide debt and inflate profits for Enron in order to boost its stock price.{{Fact|date=March 2007}} LJM entered in a total of three transactions with Enron; the first was in an effort to hedge Enron's position in Rhythms NetConnections stock, the second was the purchase of a portion of Enron's interest in a Brazilian Power Project (Cuiaba), and the third was a purchase of certificates of an SPE trust called "Osprey Trust." The first two of these transactions raised issues of significant concern in the later investigation. It is also believed that the creation of LJM was the beginning of the complex and questionable accounting practices that lead to Enron's demise.
 ==See also==