June 11, 2005
Citigroup Settles Enron Investor Suit for $2 Billion -- Is J.P. Morgan Chase Next?
Citigroup is heading into Everett Dirksen territory with its settlements in securities fraud actions. It paid $2.58 billion to settle with WorldCom investors, and now it has agreed to pay $2 billion to Enron investors to settle claims related to the company's work on behalf of the now-bankrupt energy giant. Among the investment banks that remain in the lawsuit is J.P. Morgan Chase, which resisted settling the WorldCom class action and ended up paying $600 million more than had been offered earlier by the plaintiffs class to settle. With the $2 billion paid in the WorldCom case coming on top of the recent $1.45 billion awarded to Ron Perlman related to J.P. Morgan's work on behalf of Sunbeam, this may be an expensive year for its investment banking unit. Thank goodness I still own shares in the company (by way of one of the many mergers that brought it to its current state). An AP story here discusses the Enron settlement (here). (ph)
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