The settlement repays 86% of the $57million loss.
The five banks involved in the settlement, none of which admitted wrongdoing, were Merrill Lynch & Co., Citigroup Inc., JP Morgan Chase & Co., Credit Suisse First Boston LLC and Bank of America Corp., the Associated Press reported. Haskel Slaughter, the Alabama law firm that represented the Retirement Systems, will receive $6.7 million for its work on the case, according to the AP.
After losing $57 million in 2001 from holding Enron stocks and bonds when the company imploded, the pension fund filed a suit alleging that the banks should have warned against investing in the company. The suit said that since the financial organizations either underwrote or sold Enron stocks and bonds, the companies should have been aware of the poor financial state at the energy giant.
Although there are still lawsuits pending against three former executives at the company by the Retirement Systems of Alabama, according to the AP, these suits will not move forward until after completion of the criminal litigation.
In September, three investment firms and Arthur Andersen paid the pension fund $111 million to settle claims over the WorldCom bankruptcy, a figure that represented 89% of the $25 billion fund’s losses on that investment.
« BofA Shareholders Turn Down Regulatory Study Committee Formation