New York: Merrill Lynch and Company, in an agreement with prosecutors that let it avoid criminal charges over its role in the Enron debacle, has promised not to engage in business deals – even ones that appear legal – that it believes might be used to mislead investors about a company's financial condition, a media report said.

The Wall Street firm also agreed to allow the government to monitor portions of its business for the next 18 months, the 'New York Times' reported on September 18.

The settlement involved deals late in 1999 that let Enron increase its reported profits when its business was falling short of Wall Street's expectations.

Merrill acknowledged that the government had obtained evidence that some of its employees might have committed crimes in the transactions, and it accepted responsibility for those employees' actions. Three former senior executives were charged on September 17 in connection with their roles in one deal, the paper said.

Prosecutors – whose decision last year to prosecute Enron's accountants, Arthur Andersen, contributed to that firm's collapse – said that they hoped the Merrill settlement would be seen by other companies as a model for appropriate behaviour in the financial world.

The paper quoted legal experts as saying the deal could serve as a strong deterrent to abuses in Wall Street's marketing of the complex deals known as structured finance, which critics say can obscure companies' true financial conditions, even if they arguably meet accounting rules.

PTI