J.P. Morgan Chase and Citicorp have agreed to pay the Enron piper, in theory. J.P Morgan reached an agreement last night that stated they would pay upward of $2.2 billion dollars. The massive banks have agreed to pay a lot of money in recent months of bungled business deals. Citicorp coughed theirs up last week to the tune of $2 billion.
J.P. Morgan the man would’ve been hot finding out he’d have to cough up 2.2 billion to anyone. Some historians would probably suggest old John Pierpont would’ve never allowed himself to be put into that position. But the descendent of his and Alexander Hamilton’s business ventures faced additional for the second time this year after paying out $2 billion in March to investors in the WorldCom fiasco.
This is also the second major payment the banking empire has agreed to pay either. The bank made arrangements with the federal government a couple of years ago for criminal liabilities associated with the Enron scandal. The total hit $162.5 million in the settlement.
Unfortunately, all this is chump change compared to what all the investors lost. The totals are upwards of around $45 billion and the way the process works in most cases will be the banks pay cents on the dollar. Old John Pierpont would’ve been more inline with that notion.
J.P. Morgan Chase was accused of assisting Enron in financing and developing business enterprises that led to Enron’s downfall and more importantly, helping Enron to hide debts in a variety of ways including prepays and other shady transactions. Citicorp basically fell into the same boat.
These two aren’t the only culprits either. A number of other financial institutions like Morgan Stanley and the Royal Bank of Scotland as well as a dozen or so others are steeped in the middle of this too so it’s far from over.
John Stith is a staff writer for Murdok covering technology and business.
