Merrill Puts Banker in Enron Probe on Leave

Merrill Lynch & Co. Inc. put investment banker Schuyler Tilney on leave Friday after he said he would not testify before a U.S. Senate subcommittee investigating the fall of energy trader Enron Corp.

Tilney, 46, decided not to testify Tuesday after he learned the Department of Justice was probing a deal that the Senate is reviewing. Tilney, who is head of Merrill’s energy and power group, arranged a $7-million equity investment for a company Enron set up to operate energy-generation barges.

Merrill said that based on what it knows, its employees acted properly in deals with Enron.

“However, it is placing the employee on administrative leave because the company’s policy is to cooperate fully with governmental and regulatory inquiries,” Merrill said in a statement.

Also Friday, Associated Press reported that the federal task force investigating Enron met with investigators for the California Senate committee investigating the state’s energy crisis to review documents the committee obtained under subpoena.

Six investigators from the FBI and the U.S. attorney’s office met with state Senate investigators for four hours July 15 and have had several telephone discussions since then, said a legislative source close to the investigation. Another source close to the investigation confirmed the meetings.

Investigators indicated they were interested in potential criminal fraud in electricity trading, as well as possible securities fraud, one source said.