- The Washington Times - Tuesday, August 2, 2005

NEW YORK (AP) — Canadian Imperial Bank of Commerce has agreed to pay $2.4 billion to settle investors’ claims it helped hide losses at the fallen energy trader Enron Corp. through a massive accounting fraud.

The settlement announced yesterday with the Toronto bank — Canada’s fifth-largest financial institution and the operator of the securities firm CIBC World Markets — was the biggest individual payout so far in the long-running debacle.

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 investors who lost tens of billions in Enron’s 2001 collapse.

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 contend that a number of global banks and brokerages helped Enron continue to operate and raise money even as the Houston company was imploding.

The settlements still must be approved by a federal judge in Texas, who will determine a formula under which claimants would be paid. No date for a hearing has been set, and investors might not see any funds for more than a year.

Enron spokeswoman Jennifer Lowney declined to comment on the settlement, noting that the company is a party to the litigation.

The CIBC settlement marks the seventh since investors filed numerous lawsuits over Enron’s collapse.

In June, Citigroup agreed to pay $2.2 billion followed days later by JPMorgan’s agreement to forfeit $2 billion. Those deals put pressure on remaining defendants such as CIBC to settle.

Before those agreements, there had been some $500 million of settlements reached with Lehman Brothers Holdings Inc., Bank of America Corp., Andersen Worldwide, Enron’s outside directors and Enron’s former vice chairman, Ken Harrison.

Enron investors are still seeking to hammer out agreements with a number of financial institutions, including heavy-hitters such as 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.

Goldman Sachs & Co. also is named as a defendant for its role as an underwriter of Enron securities, as are a number of law firms and accountants.

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