The University of California (UC), lead plaintiff in the case, announced the CIBC settlement at a late Tuesday afternoon news conference and in a Web site statement .
According to the UC announcement, the combined $7 billion in recoveries in the case have included:
- $2.2 billion from JPMorganChase
- $2 billion from Citigroup
- $222.5 million from Lehman Brothers
- $69 million from Bank of America
- $168 million from Enron’s outside directors
- $32 million from Andersen Worldwide.
UC said it will also arrange for a distribution of approximately $32 million for investors through the bankruptcy proceeding for the LJM2 partnership involved in the Enron scheme.
“This settlement demonstrates that the University’s strategy of aggressively pursuing the defendants is working,” said William Lerach, of Lerach Coughlin Stoia Geller Rudman & Robbins LLP, lead counsel for the university in the litigation. “We continue to pursue other defendants, including other banks that have been charged with knowingly participating in the scheme to defraud Enron investors. Beyond today’s agreement, the lawsuit continues to proceed very satisfactorily and further large recoveries are anticipated.”
An ‘Elaborate Scheme’
UC alleged that CIBC participated in an “elaborate scheme to defraud investors” that led to an estimated $40 billion to $45 billion in losses by both investors and employees. “These banks allegedly set up false investments in clandestinely controlled Enron partnerships, used offshore companies to disguise loans and facilitated phony sales of phantom Enron assets,” UC officials charged in the Web statement. “As a result, Enron executives were able to deceive investors by reporting increased cash flow from operations and by moving billions of dollars of debt off Enron’s balance sheet, thereby artificially inflating securities prices. “
Other institutional investors acting as representative plaintiffs on behalf of Enron investors include Washington State Investment Board, the Amalgamated Bank and its Long View Funds, Illinois State Board of Investment, San Francisco City and County Employees’ Retirement System, Employer-Teamsters Local Nos. 175 & 505 Pension Trust Fund, Hawaii Laborers Pension Plan, Greenville Plumbers Pension Plan, Archdiocese of Milwaukee and Staro Asset Management.
Remaining defendants include:
- Merrill Lynch
- Credit Suisse First Boston
- Barclays Bank
- Deutsche Bank
- Toronto-Dominion Bank
- Royal Bank of Canada
- Royal Bank of Scotland.
Additional remaining defendants include Goldman Sachs, because of its role as an underwriter of Enron securities, as well as former officers of Enron, its accountants, Arthur Andersen, and certain law firms.
More information is here .