If Citibank knew there was trouble two years ago, why the call by Rubin in the fall.
Message 17057556
Did you actually read my post? Citicorp held Enron stock as collateral for its loans to the "raptors". If Enron was downgraded BEFORE Citicorp could sell the stock, then they would receive much less as the stock crashed. As it is they have a Billion left over as unsecured. This is Citicorp's number.
They could legally make the loan, which is in effect a stock issuance under special rules that were passed about 20 years ago.
But they could not recieve special information.
And the fact of the loan HAS TO BE DISCLOSED. This is where Arthur Anderson may have committed their fraud.
If Citicorp were EVER classed as an insider, then the duty to disclose might fall to them and if it did, then they might have also been governed by the securites laws. They could not take that chance.
If the Government could somehow assure the Rating agencies not to lower Enron credit ratings the stock would maintain a better price while Citicorp was dumping upwards of what was 6 Billion dollars AT LEAST of Enron stock. My guess is that they had three times this amount of Enron stock, and since they held the stock as security, they were not an insider.
BUT they had to transfer the stock to their name or the name of a nominee to sell it.
My guess is that their attorney's told them that if they did that too quickly they would probably have exceeded the 5% at any one time and therefore been classed as an insider, and very LIMITED as to the amount they could sell in any month, so I figure they had to do it very slowly. But remember, this is in addition to the main reason, that they wanted to pump up the value of the stock so they could sell it first.
Another reason for the call. But again, that's their reason not Enron's. Enron doesn't care, Enron's dead by this time. |
