A group of Enron investors fronted by the University of California has gotten $2 billion out of Citigroup as it agreed to pay this amount to settle a lawsuit.
The investors accused Citigroup and several other banks of having a role in a big accounting fraud scandal at Enron. They filed several lawsuits about 3 years ago.
“It is a key priority for Citigroup to resolve major cases like this one and to put a difficult chapter in our history behind us,” stated Citigroup CEO Charles Prince. “By doing so, we will be better positioned to realize our goals. We acknowledge and appreciate the determined and professional efforts of the Regents of the University of California and its advisors in working with us to achieve a settlement that meets the goals of all parties.” Citigroup denies that it broke any laws. Fred Barbash of the Washington Post writes,
The case is one of an unprecedented blizzard of claims and charges stemming from the Enron collapse in 2001. Former Enron executives Jeffrey K. Skilling and Kenneth L. Lay are awaiting criminal trials on fraud and conspiracy charges.
The Arthur Andersen accounting firm all but went out of business after it was convicted of complicity in the Enron case, a conviction reversed this month by the U.S. Supreme Court because of flawed jury instructions.
“We are very pleased with the size of the settlement,” said William Lerach, the lawyer representing University of California investors. “It’s particularly significant in that several large, similarly situated banks remain as defendants in the case, so this is a step down the road, not the last step on the road.”
J.P. Morgan Chase, Merrill Lynch, Credit Suisse First Boston and Goldman Sachs are among the banks that have yet to settle with the investors. This settlement may pressure them to consider doing so.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
