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Pressure mounts on Merrill Lynch

New York, Oct. 4: The pressure is rising for Merrill Lynch & Co. With the filing of a criminal complaint against the former chief financial officer of Enron, Merrill Lynch finds itself under increasing scrutiny by federal prosecutors for a three-year-old transaction it conducted with the energy company.

Indeed, after months of congressional criticism of an array of financial institutions for their dealings with Enron, Merrill is the only investment firm involved in a transaction that prosecutors now contend was illegal.

The firm itself was assured by prosecutors during the summer that it was not a target of the investigation, but current and former executives remain exposed to further review.

Moreover, for a firm that has already been wrapped up in scandal — with Merrill having agreed to pay $ 100 million to settle an investigation by the New York attorney general into its analyst recommendations and with one employee having pleaded guilty to a misdemeanour in the investigation of possible insider trading by Martha Stewart — the Enron debacle only makes its position more precarious.

At issue is this: In 1999, when Merrill bought Enron’s ownership stake in a group of electrical barges off the coast of Nigeria, was its investment at risk'

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