Enron settlement soars

The payout to the University of California from failed Energy giant Enron increased yesterday:

The University of California and other investors scored their biggest recovery yet in the Enron Corp. securities fraud case Tuesday, obtaining $2.4 billion from Canadian Imperial Bank of Commerce.

The deal means UC, negotiating on behalf of thousands of Enron stock and bond holders, has obtained settlements totaling $7.12 billion. That's more than any other securities case in history, said UC's attorney, William Lerach.

"Our strategy of pursuing these settlements with the banks is working," said Lerach, a securities-fraud specialist who practices in San Diego.

In a lawsuit filed three years ago, UC said CIBC underwrote many of Enron's stock and bond offerings and had its investment analysts issue glowing reports that helped pump up Enron's stock price. The suit also said CIBC helped put together a series of "illicit partnerships" that enabled Enron to cover up its debts and inflate profits.