Courts consider company advisers, such as investment banks, to be "abettors," making them immune to securities-fraud class actions. But in the Enron case, the investment banks still may be vulnerable. Here's why:
1.The bankers took stakes in off-balance-sheet partnerships they created that helped Enron hide debt. Plaintiffs will try to prove that they are "instigators" of fraud, not just abettors.
2.Private partnership documents show that banks knew Enron's finances were shaky, but their underwriting filings on debt issues sold to the public suggest otherwise. Plaintiffs will claim the filings were fraudulent.
3.Document discovery may produce further embarrassing revelations.
Data: Legal documents, BusinessWeek