Glenn, when are you going to figure out who the real culprits and 'evil dooers' are; and who really caused this fiasco?
Posted on Sat, Jul. 03, 2004
BofA to settle Enron-related suit
$69 million payment follows claims by energy company investors
RICK ROTHACKER
Staff Writer
Bank of America Corp. said Friday it will pay Enron Corp. shareholders $69 million to settle a class-action lawsuit that accuses banks, accountants, Enron officials and others of misleading investors.
The Charlotte company is the first bank to reach a settlement in the lawsuit filed on behalf of investors who lost billions when the Houston energy company collapsed in a massive accounting scandal in 2001.
In the agreement, the nation's No. 3 bank in assets denied it broke any laws and said it settled "solely to eliminate the uncertainties, expense and distraction of further protracted litigation," according to a company statement.
Bank of America was sued for its role in underwriting certain Enron bond offerings. Unlike other banks named in the suit, initially filed in December 2001, it was not accused of fraud. The lead plaintiff is the Regents of the University of California, which lost nearly $150 million when Enron's stock went sour.
Bank of America is paying more than half of the total damages for which it was liable, said William Lerach, lead attorney for the university, in a statement.
"We anticipate this settlement will be the precursor of much larger ones in the future, especially with the banks that face liability for participating in the scheme to defraud Enron's common stockholders," he said.
The settlement is the second in the lawsuit.
The international arm of accounting firm Arthur Andersen in 2002 agreed to pay $40 million to Enron investors and employees. Andersen's U.S. unit remains a defendant. Depositions in the case began last month, and the trial is scheduled to begin in October.
The settlement will go to investors who bought Enron stock from Oct. 19, 1998, to Nov. 27, 2001, and to plaintiffs' attorneys. The agreement, which needs court approval, may have a "minimal impact" on Bank of America earnings, a company spokeswoman said.
The settlement is the latest in a series of legal and regulatory black eyes for the bank, which had profits of $10.8 billion last year. |
