Two former Enron employees and four former Merrill Lynch bankers are accused of conspiring to fake a sale of the barges so Enron could meet profit goals that generated bonuses for Enron executives. The defendants say there was no secret guarantee that someone would buy back the barges from Merrill within six months at a locked-in profit.
The case is being watched on two fronts.
"It's important because it's the beginning of the end of the prosecutions in a way. People have been waiting a long time to see someone at Enron tried," said Philip Hilder, a Houston lawyer who represents several Enron case witnesses.
Though the Justice Department's Enron Task Force obtained a successful conviction of Enron accounting firm Arthur Andersen for obstruction of justice in 2002, this case is the first to focus on a side deal like the ones that are the basis of the bigger cases against Enron's former chief executive officer, Jeff Skilling, and its former chairman, Ken Lay.
Hilder noted this case is also significant to Wall Street because bankers are on trial and "it puts some business practices under the microscope that may have been accepted elsewhere. People will now be cautioned about stepping over the line."