July 29, 2003

Banks' Enron Settlement

J.P. Morgan Chase & Co. and Citigroup, Inc have agreed to pay $305 million in fines to the SEC and the Manhatten district attorney's office to settle charges that they helped Enron hide billions of dollars worth of loans. The Washington Post ran this story on the settlement in yesterday's edition.

Quote of note: "'The shareholders' claim is that the various banks, including these two, were doing exactly what the SEC says they were doing in this action,'" [Professor Henry T.C. Hu, a law professor at the University of Texas] said. "'The banks are not paying this amount of money for charity purposes; it is not chump change. It tends to give credence to the shareholder allegations. . . . This settlement, complete with the SEC's harsh language, will be materially helpful to the massive shareholder lawsuit.'"

Quote of note II: "Under today's settlement with the SEC and the district attorney, $236 million will eventually be distributed to 'victims' of Enron's fraud. Exactly who will be eligible for restitution has not been determined."

Posted by Lyle Roberts at July 29, 2003 8:14 PM | TrackBack
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