SEC Announces Deal with Banks for Roles in Enron's Collapse

NEW YORK -- JP Morgan Chase and Citigroup agreed Monday to pay a total of $255 million for their roles in Enron's manipulation of its financial statements, The Associated Press reported.

Morgan will pay $135 million and Citigroup will pay $120 million as part of the settlement, the Securities and Exchange Commission said. The SEC said most of the money would go to victims of Enron's massive corporate fraud -- the first in a string of scandals that have tainted corporate America since 2001.

The government had accused Morgan and Citigroup of helping Enron design complex transactions that allowed it to underreport its debt.

"If you know or have reason to know that you are helping a company mislead its investors, you are in violation of federal securities laws," SEC enforcement chief Stephen Cutler said in a statement.

-- NYSSCPA.org News Staff

Posted on 7/28/03