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Federal judge approves $6.6B Enron shareholder settlement with major banks

[JURIST] A federal judge on Wednesday gave final approval to a $6.6 billion settlement [JURIST report] between former Enron shareholders and the three banks accused of helping Enron [JURIST news archive] hide financial shortcomings to deceive investors. Lead plaintiff's attorney William Lerach said the money will be paid as soon as possible to shareholders, with the Canadian Imperial Bank of Commerce, JP Morgan Chase, and Citigroup [corporate websites] responsible for payments of $2.4 billion, $2.2 billion, and $2 billion, respectively [press releases PDF]. Lehman Brothers and Bank of America have already settled shareholder claims.

Lerach has received no word from other banks named in the lawsuit as to whether they will settle before the trial date, now set for October. The civil lawsuit [plaintiff website] also names Enron and former executives Ken Lay, Jeffrey Skilling and Andrew Fastow [Chronicle profiles] as defendants, and the plaintiffs seek to recover as much of the claimed $40 billion in damages claimed as possible. The jury in the ongoing criminal fraud and conspiracy trial of Lay and Skilling is still deliberating [JURIST report]. Reuters has more.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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