Enron partners exposed to lawsuits
Date: 21 Dec 2002
A federal judge in Houston has ruled that banks, law firms and investment houses that helped construct Enron's off-the-books partnerships may be sued by investors seeking to regain their losses.
Only two defendants - Deutsche Bank and Kirkland & Ellis - had claims dismissed against them. The suit will now proceed against a number of others, including Citigroup, J.P. Morgan chase and Merrill Lynch.
The judge ruled that the defendants could be construed as having sufficient participation in the preparation of false statements about Enron's finances to merit the suit, and suggested that there was evidence to support the contention that they acted with an intent to deceive. This served notice that one of the primary lines of defence - that the financial institutions and legal firms were actually engaging in the normal practices of their business - was not likely to succeed.
Article source: NY Times
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In a recent article, the BBC's economics editor Robert Peston highlighted the fact that in 2012 the chances are that the economy - punch drunk as it is from the various flavours of debt crisis it has been pummelled with over the course of the year - will be hit by the collapse of a major bank and / or government.
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