Enron Investors Lose Again, Can’t Show UBS Liable 16 Years Later

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By Jennifer Bennett

A group of Enron Corp. investors can’t show UBS investment bank entities shared knowledge and acted together in a way that made them complicit in Enron’s 2001 fraud and collapse.

The investors once again lost in court after the U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s dismissal of the investors’ suit. The investors didn’t sufficiently allege violations of securities law, according to the court.

The investors said one UBS entity knew of Enron’s poor prospects, but another UBS entity brokered the investors’ purchase of Enron debt anyway and failed to disclose Enron’s instability, according to the court’s opinion. However, the investors didn’t show the UBS entities shared knowledge or acted together, the court said.

The court denied the investors’ request to amend their complaint. The investors first sued in 2003, then filed a first amended complaint in 2006. The investors requested permission to file a seconded amended complaint in 2011, but the lower court denied the request in 2012.

The case is Giancarlo v. UBS Fin. Servs. Inc. , 2018 BL 63160, 5th Cir., No. 16-20663, 2/26/18 .

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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