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US Citigroup - Financial group agrees to settlement in Enron lawsuit
NAME: US CITY GROUP 100605N TAPE: EF05/0512 IN_TIME: 10:40:27:05 DURATION: 00:02:08:01 SOURCES: APTN/Citigroup VNR/JP Morgan VNR DATELINE: New York - 10 June 2005/FILE RESTRICTIONS: SHOTLIST APTN New York, FILE 1. Entrance Citigroup Centre Citigroup VNR New York, FILE 2. Aerial of Citigroup headquarters in Manhattan 3. Various shots Citibank branches APTN New York, June 10, 2005 4. SOUNDBITE: (English) Bob Lenzner, National Editor of Forbes Magazine: "Well, this is not the first suit that they've (Citigroup) settled. They settled Worldcom for three billion, several weeks ago. They're settling all of the lawsuits against them for their involvement in financing these companies that went under, to get it behind them while they're making such huge profits. You know I can't remember exactly how many billions of dollars they've reserved for these lawsuits, but I think it's up towards 10 billion by now if you add everything together. This is simply, they don't want to go to court and have a jury slap them with something a lot more than two billion. That's the reason for settling.'' APTN Houston, Texas, FILE 5. Various shots Enron headquarters 6. Wide tilt-up exterior of Enron building APTN New York, June 10, 2005 7. SOUNDBITE: (English) Bob Lenzner, National Editor of Forbes Magazine: "And by the way, this sticks it to all of the other banks. This sticks it to JP Morgan Chase, to Goldman Sachs, to a bunch of Canadian banks, to all the people that finabced Enron. They will not be able to go to court now. They will have to settle". JP Morgan VNR New York, FILE 8. Exterior JPMorgan headquarters 9. Pan interior JPMorgan APTN New York, June 10, 2005 10. SOUNDBITE: (English) Bob Lenzner, National Editor of Forbes Magazine: "We need to understand one thing. No matter how many billions of dollars it is, it's not going to make up for the huge losses that were suffered by unsophisticated Enron shareholders, and employees who owned a lot of stock". APTN New York, FILE 11. Aerial Citigroup Centre in Midtown Manhattan STORYLINE Citigroup - the largest financial services company in the United States - said on Friday it would pay two (b) billion US dollars to settle a class-action lawsuit over its role in helping Enron Corporation orchestrate a massive accounting fraud that led to the energy trader's collapse. The settlement marks the largest payout so far pledged to Enron investors, who claim they were cheated out of billions of dollars when the energy company went bankrupt in 2001. It also becomes one of the largest corporate settlements in history, but still below the 2.58 (b) billion dollars Citigroup agreed to pay WorldCom Inc. investors last year. Some 50,000 stock and bondholders that filed claims as part of the lawsuit - led by the University of California's board of regents - alleges some banks helped Enron defraud investors, continue operations and raise money even as the company was imploding. It is the fifth settlement in the long-running Enron debacle, and has been seen as a catalyst for future deals with eight other banks targeted in similar lawsuits - including JPMorgan Chase & Co. In addition to JPMorgan Chase, class-action suits are pending against 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. Citigroup's payment is more than four times the total of 491.5 (m) million dollars already received from settlements with Lehman Brothers Holdings Inc., Bank of America Corp., Andersen Worldwide, Enron's outside directors and Ken Harrison, Enron's former vice chairman. Citigroup has denied committing any violation of law, saying it settled "solely to eliminate the uncertainties, burden and expense of further protracted litigation." It was the third major settlement by Citigroup of class-action litigation in little more than a year. In May 2004, Citigroup agreed to pay nearly 2.6 (b) billion as its part of the record 6.13 (b) billion settlement by investment banks, auditors and former board members to settled class action claims stemming from the 2002 collapse of WorldCom Inc. The settlement must be approved by US Federal Court, Citigroup's directors and the board of regents at the University of California.