Enron Shareholders Target Banks, Lawyers
Members of the class action suit who are hoping to recoup lost retirement funds from now-defunct Enron Corporation amended their suit in Federal court Monday to include several investment banks, securities firms, and law firms. Led by lead plaintiff the University of California Board of Regents, thousands of Enron shareholders are participants in the suit. The lawsuit isn't scheduled to come before a judge until December 1.
The University of California Board of Regents won the right to be the lead plaintiff in the suit because of its size, similar litigation experiences, and the size of its loss ($145 million) stemming from its Enron investment.
The original suit named Enron, 38 Enron executives including Kenneth Lay and Jeffrey Skilling, Big Five firm Andersen, and 21 Andersen partners. Added to the list of defendants are banks and investment houses Merrill Lynch & Co. Inc., Deutsche Bank AG, J.P. Morgan Chase & Co. Inc., Credit Suisse First Boston, Citigroup Inc., Barclays Bank P.C, Canadian Imperial Bank of Commerce, Bank of America Corp., and Lehman Bros. Holding Inc. In addition, Enron's law firm, Houston-based law firm Vinson & Elkins, is named in the suit, as is Chicago-based law firm Kirkland & Ellis, which represented some of Enron's controversial off-balance-sheet partnerships.
The 485-page amended complaint alleges that these plaintiffs participated in a scheme with Enron to deceive shareholders and other investors by helping Enron with phony deals to inflate the energy company's earnings.
"This fraudulent scheme could not have been and was not perpetrated only by Enron and its insiders," reads the lawsuit. "It was designed and/or perpetrated only via the active and knowing involvement of" Enron's law firms, banks, and accounting firm.