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Lehman Brothers, Credit Suisse First Boston, Goldman Sachs, and UBS agreed to pay a total of about $100 million.
Stephen Taub, CFO.com | US
March 8, 2005
Four more investment banks have settled civil charges for their role in the sale of WorldCom Inc. bonds two years before the company collapsed, according to The New York Times.
Lehman Brothers, Credit Suisse First Boston, Goldman Sachs, and UBS agreed to pay a total of about $100 million in a deal reached with New York State Comptroller Alan Hevesi, the trustee of the New York State Common Retirement Fund and the court-appointed lead plaintiff.
Last week Bank of America and its Fleet Securities unit agreed to pay $460.5 million to settle with WorldCom investors. And last year Citigroup agreed to pay $2.57 billion for its role in the bond offerings.
The Times stressed that the four latest banks to settle with WorldCom investors agreed to the same formula used by Citigroup, which was the company's lead banker, even though the four played minor roles in only one of two key bond offerings. Under the deal, Lehman agreed to pay $62.7 million while the other three will pay about $12.5 million each, according to the paper.
Ten other underwriters remain as defendants, including J.P. Morgan Chase & Co. and Deutsche Bank AG, as well as former WorldCom accountant Arthur Andersen LLP and 12 former company directors.
"We commend these four investment banks for putting this issue behind them,'' said Hevesi, according to TheStreet.com. "While we are willing to talk with other defendants about potential settlements, we are looking forward to the start of trial against any remaining defendants on March 17, 2005.''