The lawsuits stemmed from sham trades by the company's former CMS Marketing Services and Trading unit, which inflated revenue in 2000 and 2001 by $5.2 billion.
In its suit, Allegheny said Merrill officials had inflated revenue and engaged in sham trades with Enron that artificially lifted the value of Merrill's trading unit in 1999.
In effect, the lawsuit accuses Klein Maus of manipulating the prices through sham trades among numerous controlled accounts, after which the inflated stocks were sold into the accounts of unsuspecting customers.
Federal prosecutors in New Jersey, meanwhile, charged Mr. Murmylyuk on Tuesday with working with a ring that stole $1 million by hacking into retail brokerage accounts at Scottrade, E*Trade, Fidelity, Schwab and other brokerage firms and executing sham trades.
When creditors started calling in the loans, a desperate Mr. Blech started engaging in sham trades to make it look as if he was getting his house in order.
Certainly, there were factors other than energy trading and sham trades at work.
The details of possible market manipulation are complex as are the facts of whether the companies may have engaged in sham trades that cancelled each other out.
Last week, the Court of Appeals for the Eighth Circuit in St . Louisoverturned 3 to 0, a federal district court ruling that Alliant Energy, which operates a large Iowa electric utility, engaged in sham stock trading to eliminate nearly $100 million of taxes.
CMS Energy, an energy trader, said today that its chief executive, William T. McCormick Jr., resigned after the company disclosed sham electricity trades.
