Merrill trio face charges over Enron

THE investigation into the vast financial fraud at Enron, the Texas energy company, has finally made its way into Wall Street as three bankers from Merrill Lynch surrendered to the Federal Bureau of Investigation today.

The three - Daniel Bayly, James Brown, and Robert Furst - handled one of the allegedly fraudulent financial engineering transactions that helped Enron pump up its profits when it was making billions of dollars of losses. They engineered the sale of three electricity-producing barges moored off the coast of Nigeria.

In fact the sale was a disguised loan, with the barges held as collateral, which Enron then misleadingly booked as a sale to inflate earnings. The Merrill bankers are expected to be charged today. The Securities and Exchange Commission brought similar civil charges against Merrill earlier this year, and the case was settled with a fine of $80m (£50m).

However, the latest charges are criminal and do not involve the bank. Furst, who was a managing director of investment bank, left Merrill in 2001. Bayly, the former global head and chairman of investment banking, retired last year.