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Wall Street's Involvement

Investment banks conceived and created financial instruments (especially derivatives contracts) that allowed Enron to inflate its reported sales and profits to the extent that it appeared to be one of America's largest companies. Enron conceived and created other entities (especially partnerships) that allowed it to not reveal to the investing public the full extent of its liabilities. Enron paid substantial fees to the investment banks for the creation of these entities.

“Investment bankers at some big Wall Street firms,” wrote a reporter for The New York Times, “helped create and find investors for complex partnerships that the Enron Corporation used to mask its true financial condition…After hatching that idea, some of those bankers…sold it to other corporations that wanted to make their financial statements look better too.”[22]


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