AP, Kristen Hays, 22 February 2006
HOUSTON (AP) -- Down the hall from the fraud and conspiracy trial of Enron Corp. founder Kenneth Lay and former Chief Executive Jeffrey Skilling, a federal judge gave initial approval Wednesday for three more banks to pay $5.8 billion to settle civil claims that they helped the company manipulate earnings.
U.S. District Judge Melinda Harmon is expected to give final approval to the deals with the Canadian Imperial Bank of Commerce, JP Morgan Chase & Co. and Citigroup Inc. later, said William Lerach, who represents the University of California, the lead plaintiff in the conglomerate of shareholder lawsuits in Enron's hometown of Houston.
The litigation's settlement tally has so far reached $7.2 billion against Wall Street firms accused of helping the energy trader hide losses in a massive accounting fraud before it filed for bankruptcy protection in December 2001.
As Harmon addressed the settlements, her colleague U.S. District Judge Sim Lake presided over the fourth week in the criminal trial of Lay and Skilling down the hall on the ninth floor of Houston's federal courthouse.
Lay and Skilling also are named as defendants in the shareholder lawsuit, which is slated to go to trial in November. Lerach and other plaintiffs' lawyers visited the criminal trial after the settlement hearing wrapped up.
The three banks last year announced settlements with the largest amounts yet: CIBC, $2.4 billion; JP Morgan, $2.2 billion; and Citigroup, $2 billion. Lerach said Wednesday that combined $5.8 billion has risen to $6.7 billion with interest.
Before those agreements, some $500 million of settlements had been reached with Lehman Brothers Holdings Inc., Bank of America Corp., Andersen Worldwide, and 18 former outside Enron directors -- including 10 who put up $13 million from their own pockets after they had sold inflated stock.
Other banking and brokerage heavyweights that have not struck settlements and remain defendants in the action include Merrill Lynch & Co., Barclays PLC, Toronto-Dominion Bank, Royal Bank of Canada, Deutsche Bank AG and the Royal Bank of Scotland Group PLC.
About 50,000 Enron stock and bond holders led by the university's board of regents filed claims in the action. Approximate damages reach $47 billion, but Lerach has said the actual awards will be pennies on the dollar.
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HOUSTON (AP) -- Down the hall from the fraud and conspiracy trial of Enron Corp. founder Kenneth Lay and former Chief Executive Jeffrey Skilling, a federal judge gave initial approval Wednesday for three more banks to pay $5.8 billion to settle civil claims that they helped the company manipulate earnings.
U.S. District Judge Melinda Harmon is expected to give final approval to the deals with the Canadian Imperial Bank of Commerce, JP Morgan Chase & Co. and Citigroup Inc. later, said William Lerach, who represents the University of California, the lead plaintiff in the conglomerate of shareholder lawsuits in Enron's hometown of Houston.
The litigation's settlement tally has so far reached $7.2 billion against Wall Street firms accused of helping the energy trader hide losses in a massive accounting fraud before it filed for bankruptcy protection in December 2001.
As Harmon addressed the settlements, her colleague U.S. District Judge Sim Lake presided over the fourth week in the criminal trial of Lay and Skilling down the hall on the ninth floor of Houston's federal courthouse.
Lay and Skilling also are named as defendants in the shareholder lawsuit, which is slated to go to trial in November. Lerach and other plaintiffs' lawyers visited the criminal trial after the settlement hearing wrapped up.
The three banks last year announced settlements with the largest amounts yet: CIBC, $2.4 billion; JP Morgan, $2.2 billion; and Citigroup, $2 billion. Lerach said Wednesday that combined $5.8 billion has risen to $6.7 billion with interest.
Before those agreements, some $500 million of settlements had been reached with Lehman Brothers Holdings Inc., Bank of America Corp., Andersen Worldwide, and 18 former outside Enron directors -- including 10 who put up $13 million from their own pockets after they had sold inflated stock.
Other banking and brokerage heavyweights that have not struck settlements and remain defendants in the action include Merrill Lynch & Co., Barclays PLC, Toronto-Dominion Bank, Royal Bank of Canada, Deutsche Bank AG and the Royal Bank of Scotland Group PLC.
About 50,000 Enron stock and bond holders led by the university's board of regents filed claims in the action. Approximate damages reach $47 billion, but Lerach has said the actual awards will be pennies on the dollar.
