JP Morgan Pressed Over Enron

CNN reports that a Washington lawmaker is now pressing for JP Morgan to release more information about its role in transactions that may have allowed an Enron subsidiary to borrow $1bn without the loans appearing on the company's balance sheet.

Henry Waxman, a Congressman representing California, has said that he is not satisfied with JP Morgan's explanation about the loan transaction. The bank claims that any allegations that the firm assisted Enron disguising loans are 'baseless'.

The bank was paid around $11.5m for its services in connection with the transaction, which is thought to have provided Enron with $1bn in minority interest equity finance.

The lawmaker seems to be suggesting that JP Morgan had a duty to ensure that Enron made the liabilities public. A spokesman for JP Morgan has said: 'Whether a financing should be reported as a loan or some other liability depends on numerous factors and is a determination made by the client's accountants, auditors, and attorneys, not JP Morgan Chase.'

The bank has been named with eight other Wall Street firms in a $25bn lawsuit filed by Enron shareholders claiming that the banks conspired with the company and were responsible for the substantial losses subsequently incurred by investors.

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