Re: Authorised Traders : Montreal & Chicago

David

The set-up for the financial trading is similiar except that the instructions
are relaid by e-mail each night to New York and Tokyo. Tim Pateman
(authorised trader in London) sends details of positions and instructions on
prices / volumes.

The mail provide directions on pricing (off set basis on EOL) and volumes,
creating an envelope in which they can trade.
They must call for further instructions if the price shifts by more than $10
($100 for Tin & Nickel) or the position by more than 100 lots.

Regards
Andy

Tim Poullain-Patterson
09/11/2000 15:27
To: David Port/Market Risk/Corp/Enron@ENRON
cc: Andrew Cornfield/LON/ECT@ECT, Bjorn Hagelmann/HOU/ECT@ECT, Sally
Beck/HOU/ECT@ECT, Ted Murphy/HOU/ECT@ECT, Shona Wilson/NA/Enron@Enron, Mike
Jordan/LON/ECT@ECT, Robert Soeldner/LON/ECT@ECT, Lloyd Fleming/LON/ECT@ECT,
Marcelo Parra/NYC/MGUSA@MGUSA

Subject: Re: Authorised Traders : Montreal & Chicago

David,

The business model you outline is actually the one we are implementing with
one big difference - the Head Trader in London (Sam Hainsworth) calls the
sales person each day to tell him what to do before they speak to any
customers. As you point out, these conversations are recorded so if the sales
person does anything other than what is agreed at the outset of each day,
then they will be red carded.

I refer you back to the memo supplementing the updated list of authorised
traders that I sent out and which Marcelo and Sam have discussed with
Commercial staff in both these offices (Shona and Bjorn have this memo), as
well as Marcelo's operational plan.

Clarification point - when Andy says "internally" he means that Commercial
(Rob Soeldner) is taking a lead in resolving Joe Robertson's concerns.

Regards,
Tim

From: David Port @ ENRON
09/11/2000 13:52

To: Andrew Cornfield/LON/ECT@ECT
cc: Bjorn Hagelmann/HOU/ECT@ECT, Sally Beck/HOU/ECT@ECT, Ted
Murphy/HOU/ECT@ECT, Shona Wilson/NA/Enron@Enron, Mike Jordan/LON/ECT@ECT,
Robert Soeldner/LON/ECT@ECT, Tim Poullain-Patterson/LON/ECT@ECT, Lloyd
Fleming/LON/ECT@ECT

Subject: Re: Authorised Traders : Montreal & Chicago

How about this for a business model for an origination and trading outfit.

salesperson talks to customer
customer agrees to trade
salesperson phones trading desk and gets price (trading desk is London or NY
- NB: all lines are taped)
salesperson tell customer
customers says ok
salesperson says "done" to customer and trading desk
trading desk books deal, middle and back office processes kicks in, sends out
and chases up confirm etc
accounting process identifies value added by salesperson and gives them a
piece of the price as a credit
no bank accounts or signing authority in sales office
no accountants, middle office people or other similar humans in the sales
office, just sales people
all hedging and risk taking resident in trading books in NY or London

Can we not make this work ?
DP

To: Bjorn Hagelmann/HOU/ECT@ECT
cc: Sally Beck/HOU/ECT@ECT, Ted Murphy/HOU/ECT@ECT, Shona
Wilson/NA/Enron@Enron, David Port/Market Risk/Corp/Enron@ENRON, Mike
Jordan/LON/ECT@ECT, Robert Soeldner/LON/ECT@ECT, Tim
Poullain-Patterson/LON/ECT@ECT

Subject: Re: Authorised Traders : Montreal & Chicago

Bjorn

As discussed, given Joe's comments below, a note to confirm that this being
dealt with internally.

Rob Soeldner has made it clear to Joe that:

Enron places great importance on trading controls. These are non-negotiatable.
The suggested course of action is not an option
We aren't seeking to close any of the Agency offices given implemetation of
these controls.

Joe is not in yet - Rob will be discussing with him further when the US gets
in.

Of note - Joe is on the commercial side, Marcelo Parra who is responsible
for the operational side is fully onboard for the operational changes made.

Regards
Andy

---------------------- Forwarded by Andrew Cornfield/LON/ECT on 09/11/2000
11:07 ---------------------------

Joe Robertson@MGUSA
08/11/2000 20:38
To: Tim Poullain-Patterson/LON/ECT@ECT
cc: Andrew Cornfield/LON/ECT@ECT, Lloyd Fleming/LON/ECT@ECT, Marcelo
Parra/NYC/MGUSA@MGUSA, Michael Farmer/EU/Enron@ENRON@ECT, Naomi
Connell/LON/ECT@ECT, Robert Soeldner/LON/ECT@ECT, Sam
Hainsworth/EU/Enron@Enron@ECT

Subject: Re: Authorized Traders : Montreal & Chicago

As a practical matter the procedures outlined are not workable. We need to
find a way to go forward that works and can satisfy all concerned.

Either the people in these offices can be entrusted to transact and execute
business or we should consider closing these offices and relocating some of
the people which I do not believe makes any sense at all.

Joseph E. Robertson, Jr.
Enron Metals & Commodity Corp.
520 Madison Avenue
28th Floor
New York, NY 10022
Tel: 212.715.5254
Fax: 212.715-2357
E-mail: joe.robertson@enron.com