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Wall Street brokerage house Lehman Brothers Holdings Corp. has agreed to pay $222.5 million to settle a class action lawsuit alleging that it and other banks and brokerages helped the failed energy giant Enron Corp. mislead investors. The University of California, lead plaintiff in the case filed in Houston, announced the settlement Friday. The settlement will be shared among the thousands of institutional and individual investors. The university alone lost nearly $150 million when Enron imploded. In a brief release, Lehman Brothers said the settlement will not result in a charge to the company’s income statement and that the settlement remains subject to final court approval. Lehman’s settlement is the third since the case was filed weeks before Enron went bankrupt in December 2001 amid crushing revelations of hidden debt, inflated profits and accounting tricks. Bank of America Corp. in July agreed to pay $69 million to settle similar allegations. Lehman and Bank of America weren’t accused of defrauding the energy company’s shareholders. They were sued in their capacity as underwriters for some Enron and Enron-related debt offerings. The suit was filed on behalf of large investors, which lost millions of dollars when Enron collapsed. Other banks and brokerages named as defendants in the lawsuit include Wall Street titans Citigroup Inc. and J.P. Morgan Chase & Co. The university also reached a $40 million settlement in July 2002 with Andersen Worldwide SC, the former umbrella organization for one-time Big Five accounting firm Arthur Andersen LLP which remains a defendant in the suit. Arthur Anderson had been Enron’s auditor and was convicted in June 2002 of obstruction of justice for destroying and altering Enron-related documents as regulators began probing the energy company’s finances in October and November 2001. Copyright 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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