NEW YORK (CNN/Money) - J.P. Morgan Chase & Co. executives again defended their work with Enron Corp. Wednesday, saying the bank did not help the bankrupt energy trader hide debt when structuring financing for it.

"We acted properly and with integrity in all Enron matters," CEO Bill Harrison said in a conference call with analysts, a day after other bank executives testified before the Senate about its transactions with Enron. "We have not knowingly assisted Enron or any other company in misrepresenting facts about their financial condition."

Investigators with the Senate's Permanent Subcommittee on Investigations said Tuesday that Morgan and Citigroup (C: Research, Estimates) helped Enron with more than $8 billion in complex financing arrangements that made Enron look rich in cash rather than heavily indebted.

Enron, once the seventh-largest U.S. company, filed for bankruptcy last December after revealing the full extent of its debt. Many of its shareholders suffered huge losses, including employees who had invested their retirement savings in the company's stock.

Enron's collapse also began to erode investor confidence in corporate accounting, a process that continues to this day, sinking U.S. stock markets and threatening the economy.

After tumbling Monday and Tuesday, shares of Morgan (JPM: up $2.41 to $22.49, Research, Estimates) and Citigroup (C: up $1.55 to $28.55, Research, Estimates) rose Wednesday morning, though investors remained worried about the impact of the news on the banks.

Morgan executives said the selloff was an overreaction to the Senate hearings and to broader concerns about corporate accounting.

"We had a highly politicized media event yesterday in Washington that didn't change where we were last week," Harrison said. "There's no new news here. I'm personally buying more stock, today (Wednesday), as will a lot of our executive committee."

But Morgan executives could offer no guidance about how long it might take for the bank to be cleared of wrongdoing.

"I wish I could tell you," Vice Chairman Marc Shapiro said. "We're cooperating with all investigations, and we're prepared to do that as long as it takes."

Diane Glossman, who covers J.P. Morgan and Citigroup for UBS Warburg, said the situation, while it may not look good, does not appear to be illegal.

"These stocks are not for the faint of heart as we believe the headline risk my be pronounced," Glossman told clients.

Ironically, Morgan analyst Catherine Murray on Wednesday upgraded Citigroup stock to a "buy" from "market performer" and added it to its "focus list" of stocks.

"We believe it is unlikely that Citigroup knowingly participated in fraudulent activity related to Enron, and history suggests bank stocks bounce highly after a market crisis," Murray wrote.

Both banks have been accused by congressional investigators of helping Enron hide debt by funneling money to it through third-party "shell" companies set up and controlled by the banks.

The third-party companies would pre-pay Enron for a promised delivery of oil and gas; but Enron would usually pay the money back instead, along with charges that amounted to finance charges.

Bank officials basically admitted Tuesday that the arrangements helped Enron get cash without incurring a debt on their balance sheet, but they pointed out that the requirement to repay the money or deliver the commodities were listed on Enron's balance sheet as a trading liability.

The banks also have maintained that these sorts of arrangements were widely used by many companies, that they had done nothing wrong, and that they were assured by Enron and its auditor, Arthur Andersen, that the deals would be reported legitimately.

In an internal e-mail, discovered by congressional investigators, a Morgan executive said Enron "loved" such deals because they helped it hide debt by "burying" it elsewhere in its financial statement. Morgan executives said Tuesday and again Wednesday that the e-mail was simply wrong.

"That comment was inaccurate, and its tone was inappropriate," Harrison said.

Morgan officials also reassured investors that it had plenty of liquidity and that it didn't expect its credit rating to be affected or its financing activities to be hindered.

The Senate charges aren't the only problems for financial services companies. They face challenges because of their links to the corporate scandals that have helped send stocks to five-year lows.

J.P. Morgan and Citigroup lent money to WorldCom, which filed for the biggest bankruptcy in history on Sunday. And both companies have stock research divisions, a line of business that critics says exists more for winning investment banking clients than advising shareholders.

Judah Kraushaar, who covers financial services companies for Merrill Lynch, says the Senate charges mean the Citigroup and Morgan likely will face fines and penalties, raising the risk of shareholder lawsuits.

"We think severe financial injury is already discounted in the major banks stocks although we think they could mark time in the near term," Kraushaar told clients.

On Wednesday, the law firm of Lovell & Stewart said it filed a class action lawsuit on behalf Citigroup shareholders, seeking damages. The firm alleges that the company misrepresented its exposure to Enron.