The University of California has reached a $222.5 million settlement with Lehman Brothers in the Enron Corp. securities class action lawsuit. The university is lead plaintiff representing a class of Enron investors who lost billions of dollars.
"This agreement continues a pattern of highly favorable settlements with underwriter defendants and provides a substantial recovery to the purchasers of the Enron debt securities that Lehman Brothers participated in underwriting," said James Holst, the university's general counsel.
As one of the underwriters on millions of dollars of Enron notes, Lehman Brothers was charged with violations of the 1933 Securities Act, which makes underwriters liable for misstatements in a security registration statement. Under the 1933 Act, Lehman's potential liability was limited to the loss of value of the securities it sold in the offerings it underwrote. Lehman was not charged with fraud.
To read the release, click here.