NYT: Canadian Bank Pays $2.4 Billion to Settle With Enron Investors

[DeepModem Mom]

Canadian Bank Pays $2.4 Billion to Settle With Enron Investors
By JENNIFER BAYOT
Published: August 2, 2005


A Canadian bank accused of helping Enron defraud investors agreed today to pay $2.4 billion in the third and largest settlement to date in the class-action lawsuit against Enron's former advisers.

The Canadian Imperial Bank of Commerce, or CIBC, was a lesser-known adviser to Enron, but its payment tops both the $2.2 billion settlement with J.P. Morgan Chase and the $2 billion settlement with Citibank. Compared with the other two, CIBC is a small company with shallow pockets, and its steep settlement points to the rising cost of hesitation among Enron defendants.

The settlement puts greater pressure on those banks remaining - especially larger Wall Street firms like Merrill Lynch and Credit Suisse First Boston - to reach their own settlements quickly, instead of holding out for the 11th-hour agreements that prevailed years ago. Moreover, the pattern suggests that the other companies are likely to pay larger amounts the longer they delay, even though a trial over the lawsuit is still more than a year off.

William S. Lerach, the lead counsel for the University of California, the largest plaintiff in the class-action shareholder lawsuit, acknowledged in a conference call with reporters this afternoon that those who settle earlier "would settle better than those who do not come to the table at an appropriate time." The University of California estimates that it invested $150 million in Enron, which filed for bankruptcy protection in 2002 and ultimately collapsed, making its shares worthless.

The settlement brings the total amount recovered so far to $7.1 billion, the largest recovery in a securities case. By contrast, the pool of money available to compensate investors in WorldCom, which perpetrated the largest accounting fraud in history, is $6.13 billion....


http://www.nytimes.com/2005/08/02/business/02cnd-enron.html?hp&ex=1123041600&en=cc28fb3437a4837b&ei=5094&partner=homepage

[Maple]

1. Good

Make it right.

[Lisa]

2. my bank ...

Shame on them! I just know that they're going to hike my "service charges" to pay for this. I'm glad that I've given most of my money to the credit union to look after ... I don't trust the CIBC to make decisions anymore. (They also dropped the ball when they pulled their Instant Tellers out of a university with >15k students and staff, on the grounds that "it's more efficient for people to use the ones at the shopping mall a kilometre away".)

[anotherdrew]

3. banks are trying to get rid of cash machines all over

pre-planning for trying to push people to a completly cashless system before too much longer.

[Lisa]

4. I noticed that they're contracting out their machines ...

If it's possible for an already-private corporation to "privatize" -- they're doing it!

Meanwhile, a lot of people here are switching over to Scotiabank instead, because they still have machines on campus.