re : debt trading losses sally , brent and gary ,
in a meeting with bryan , jeff , gary and markus on monday , november 20 th , i
showed bryan a copy of the monthly price verification procedures and the book
administrator ' s price verification comparison spreadsheet . i also showed
brent this information later in the day , as he had to leave before we all
left .
therefore , i find bryan ' s operations ' bullet wrong and misleading . this is
not the statement that was made and agreed to on monday when we all met .
this statement is also not consistent with what is actually in the
attachment . you will receive a copy of the price verifcation spreadsheet for
the last six months on monday .
please call me or theresa with questions .
sheila
- - - - - - - - - - - - - - - - - - - - - - forwarded by sheila glover / hou / ect on 11 / 24 / 2000 05 : 14
pm - - - - - - - - - - - - - - - - - - - - - - - - - - -
bryan seyfried
11 / 24 / 2000 12 : 24 pm
to : sheila glover / hou / ect @ ect
cc : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect , gary
hickerson / hou / ect @ ect , jeff kinneman / hou / ect @ ect , tom doukas / na / enron @ enron ,
theresa t brogan / hou / ect @ ect
subject : re : debt trading losses
ok , sorry for the miscommunication , can i get copies of the price
verification memo for the debt book for the last 6 months pls .
from : sheila glover 24 / 11 / 2000 17 : 06
to : bryan seyfried / lon / ect @ ect
cc : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect , gary
hickerson / hou / ect @ ect , jeff kinneman / hou / ect @ ect , tom doukas / na / enron @ enron ,
theresa t brogan / hou / ect @ ect
subject : debt trading losses
bryan ,
i think the second bullet is misleading . the bullet is not reflective of
what is actually stated in the attached document .
there is a month - end price verification process on the credit book .
trader pricing is compared to prime broker pricing . where the mark is
greater that 2 points , the difference is discussed with the trader . trader
must then amend the mark or provide third party substantiation for the
illiquid position .
the price verifiaction comparison spreadsheet with broker quotes is filed and
maintained by risk management .
the operations break - down in the process relates to :
triplets excluded from the monthly price verification process and not
escalated , prioritized to management
telewest pricing relied on a price from the prime broker which was manually
sourced and not current
price verification comparison results should be formalized and distributed
to senior management .
thanks . sheila
- - - - - - - - - - - - - - - - - - - - - - forwarded by sheila glover / hou / ect on 11 / 24 / 2000
10 : 13 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
bryan seyfried
11 / 23 / 2000 01 : 31 am
to : richard causey / corp / enron @ enron , rick buy / hou / ect @ ect , john
sherriff / lon / ect @ ect
cc : michael r brown / lon / ect @ ect , fernley dyson / lon / ect @ ect , sally
beck / hou / ect @ ect , ted murphy / hou / ect @ ect , mike jordan / lon / ect @ ect , david a
wall / risk mgmt / lon / ect @ ect , jeff kinneman / hou / ect @ ect , gary
hickerson / hou / ect @ ect , sheila glover / hou / ect @ ect , brent a price / hou / ect @ ect ,
richard sage / lon / ect @ ect , bryan seyfried / lon / ect @ ect
subject : debt trading losses
we have discovered two positions in the debt trading book which were not
being marked to market . the current mark of the 2 positions results in
approximately $ 4 . 7 million loss . the details are in :
the primary control issues are :
? trader did not adjust price to reflect the effect of market movements
? operations did not perform monthly price verification processes
? desk management failed to recognize that the marks on these two trades had
not moved over the term of the transactions ( ql ' 00 - nov 15 th )
the losses have been recognized and a full review of the book is ongoing by
operations . the trader has been relieved of his responsibilities and we will
implement the steps agreed with operations to ensure that we have a robust
approach to controls for the debt trading book going forward .
re : debt trading losses
sally , brent and gary ,
in a meeting with bryan , jeff , gary and markus on monday , november 20 th , i
showed bryan a copy of the monthly price verification procedures and the book
administrator ' s price verification comparison spreadsheet . i also showed
brent this information later in the day , as he had to leave before we all
left .
therefore , i find bryan ' s operations ' bullet wrong and misleading . this is
not the statement that was made and agreed to on monday when we all met .
this statement is also not consistent with what is actually in the
attachment . you will receive a copy of the price verifcation spreadsheet for
the last six months on monday .
please call me or theresa with questions .
sheila
- - - - - - - - - - - - - - - - - - - - - - forwarded by sheila glover / hou / ect on 11 / 24 / 2000 05 : 14
pm - - - - - - - - - - - - - - - - - - - - - - - - - - -
bryan seyfried
11 / 24 / 2000 12 : 24 pm
to : sheila glover / hou / ect @ ect
cc : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect , gary
hickerson / hou / ect @ ect , jeff kinneman / hou / ect @ ect , tom doukas / na / enron @ enron ,
theresa t brogan / hou / ect @ ect
subject : re : debt trading losses
ok , sorry for the miscommunication , can i get copies of the price
verification memo for the debt book for the last 6 months pls .
from : sheila glover 24 / 11 / 2000 17 : 06
to : bryan seyfried / lon / ect @ ect
cc : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect , gary
hickerson / hou / ect @ ect , jeff kinneman / hou / ect @ ect , tom doukas / na / enron @ enron ,
theresa t brogan / hou / ect @ ect
subject : debt trading losses
bryan ,
i think the second bullet is misleading . the bullet is not reflective of
what is actually stated in the attached document .
there is a month - end price verification process on the credit book .
trader pricing is compared to prime broker pricing . where the mark is
greater that 2 points , the difference is discussed with the trader . trader
must then amend the mark or provide third party substantiation for the
illiquid position .
the price verifiaction comparison spreadsheet with broker quotes is filed and
maintained by risk management .
the operations break - down in the process relates to :
triplets excluded from the monthly price verification process and not
escalated , prioritized to management
telewest pricing relied on a price from the prime broker which was manually
sourced and not current
price verification comparison results should be formalized and distributed
to senior management .
thanks . sheila
- - - - - - - - - - - - - - - - - - - - - - forwarded by sheila glover / hou / ect on 11 / 24 / 2000
10 : 13 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
bryan seyfried
11 / 23 / 2000 01 : 31 am
to : richard causey / corp / enron @ enron , rick buy / hou / ect @ ect , john
sherriff / lon / ect @ ect
cc : michael r brown / lon / ect @ ect , fernley dyson / lon / ect @ ect , sally
beck / hou / ect @ ect , ted murphy / hou / ect @ ect , mike jordan / lon / ect @ ect , david a
wall / risk mgmt / lon / ect @ ect , jeff kinneman / hou / ect @ ect , gary
hickerson / hou / ect @ ect , sheila glover / hou / ect @ ect , brent a price / hou / ect @ ect ,
richard sage / lon / ect @ ect , bryan seyfried / lon / ect @ ect
subject : debt trading losses
we have discovered two positions in the debt trading book which were not
being marked to market . the current mark of the 2 positions results in
approximately $ 4 . 7 million loss . the details are in :
the primary control issues are :
? trader did not adjust price to reflect the effect of market movements
? operations did not perform monthly price verification processes
? desk management failed to recognize that the marks on these two trades had
not moved over the term of the transactions ( ql ' 00 - nov 15 th )
the losses have been recognized and a full review of the book is ongoing by
operations . the trader has been relieved of his responsibilities and we will
implement the steps agreed with operations to ensure that we have a robust
approach to controls for the debt trading book going forward .