Report: Feds Probe J.P. Morgan/Enron Deals
NewsMax.com Wires
Friday, Feb. 22, 2002
NEW YORK -- The Federal Reserve Bank of New York is examining J.P. Morgan Chase & Co.'s accounting for commodity-related trades with Enron Corp., the Wall Street Journal reported Friday, citing internal central-bank documents.
The Journal said the trades being reviewed appear to relate to an offshore entity set up by the old Chase Manhattan Bank a decade ago through which it came to do substantial business with Enron.
The large volume of trades between the offshore operation, called Mahonia Ltd., and Enron surfaced weeks ago in litigation connected with the Houston-based company's bankruptcy-court filing, raising questions to whether Mahonia was a vehicle for loans disguised as trades, the newspaper said.
The documents did not indicate that J.P. Morgan was the subject of a formal investigation, the Journal said.
No one was immediately available at J.P. Morgan to comment.
Joseph Evangelisti, a J.P. Morgan spokesman, told the Journal: "It is perfectly normal for the Fed, in the course of its ongoing and continuing review of the banks it supervises, to seek information on high-visibility issues or transactions. In all our dealing with the Fed, we cooperate fully."
Copyright 2002 by United Press International.
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