Canada bank hit for $2.4b on Enron
NEW YORK -- Canadian Imperial Bank of Commerce has agreed to pay $2.4 billion to resolve investors' claims it helped hide losses at Enron Corp., marking the biggest individual settlement since the energy trader collapsed in a massive accounting fraud.
The settlement disclosed yesterday with the Toronto-based bank -- Canada's fifth-largest financial institution -- could help compensate investors who lost tens of billions of dollars when Enron failed in 2001.
Combined with similar agreements with Citigroup Inc. and JPMorgan Chase & Co. and others, the settlements have now reached more than $7 billion, said lawyers for the wronged investors.
Some 50,000 Enron stock and bond holders led by the University of California's board of regents filed claims as part of the lawsuit. Investors claim a number of global banks and brokerages helped Houston-based Enron continue to operate and raise money even as the company was imploding.
''The settlement reflects the level of involvement from CIBC, and reflects the fact they waited for others to settle before them, and that reflects the settlement amount," said William Lerach, the lawyer for the University of California, which lost $144.7 million when Enron declared bankruptcy.
A federal judge in Texas will determine a formula under which claimants would be paid. But investors might not see any funds for more than a year.
The CIBC settlement marks the seventh since investors filed lawsuits over Enron's collapse.
Enron investors are still seeking to hammer out agreements with a number of financial institutions, including Barclays PLC, Credit Suisse First Boston, Merrill Lynch & Co., Toronto Dominion Bank, Royal Bank of Canada, Deutsche Bank AG and the Royal Bank of Scotland.
