http://www.nytimes.com/2002/11/22/business/suit-in-texas-says-el-paso-contrived-energy-trades.html
Round-trip and wash trade are falsifying revenue through fake sales. In a legal summary, these are trades that occur when corporations create a buy and sale transaction, with the same price and terms, to increase revenue and trading volumes.
In April of 2000, El Paso Corporation, Duke Energy and Reliant Energy, with three other companies, created International Exchange to compete with Enron online in the new online trading. International Exchange primary purpose was to compete with Enron. Competition became a race for the highest revenue. Although El Paso denied any wrongdoing, Duke Energy admitted to round-trip trading but Reliant did not comment whether they committed any illegal trading. However, records show that Duke was involved in the trading with El Paso along with Reliant. These trades resulted in a $1.1 billion revenue for El Paso.
When Enron collapse, El Paso's shares dropped and the truth came out about El Paso's ignoring the accounting rules. El Paso's hope was like any other company, to increase the amount per share. Also, El Paso was accused of keeping $1.9 billion in debts that related to a partnership named Chapparel. In the end, executives said proper accounting rules were followed in the partnership and stand by the argument of El
Paso innocence in the accusation of round-trip fraud.
