MG

Mark,

I thought you might have a view on this as well.

regards
bruce
---------------------- Forwarded by Bruce Garner/Corp/Enron on 07/22/2000
04:57 AM ---------------------------

David Forster
07/21/2000 08:43 PM
To: Bruce Garner/Corp/Enron@ENRON, Lara Fields/HOU/ECT@ECT, Edmund
Cooper/LON/ECT@ECT, Justin Boyd/LON/ECT@ECT, Paul Simons/LON/ECT@ECT
cc: Amita Gosalia/LON/ECT@ECT, Louise Kitchen/HOU/ECT@ECT

Subject: MG

As you know, we are looking at doing the following with MG:

1) Moving the Market Maker Application into EnronOnline - effectively, by
putting the same products on EnronOnline as are currently on Market Maker,
then shutting down Market Maker and putting a hyperlink in to EnronOnline

2) Launching financial metals products on EnronOnline, which would transacted
by MG.

I have some concerns about both of these activities.

(1) Until today, I did not realise that the Market Maker application actually
involves the transaction of an LME contract. In other words, when a customer
buys from MG on the Market Maker app, they are buying LME contracts. We have
taken pains to distinguish between what we do on EnronOnline - which is to
transact on products which might settle against a published price vs.
transacting on the actual exchange contract. As you know, Exchange contracts
are subject to a different set of regulations and scrutiny than currently
applies to EnronOnline.

(2) Because MG trades Exchange contracts on the floor of the exchange, they
are subject to more stringent regulations than Enron. I am concerned that if
MG is transacting financial products on EnronOnline, that EnronOnline could
come under greater scrutiny by the SFA. Paul: Can you comment on whether or
not this is a risk? If this is a risk, would it be mitigated by having
another Enron company handle EnronOnline transactions (with sleeving back to
MG), or are we already sunk by virtue of the fact that MG is now in the Enron
family?

Comments from any/all recipients invited . . .

Thanks,

Dave