for those who still don't comprehend what enron was really about (other than the company bilked it's investors), the latimes has a good write up about citigroup's settlement.
The suit said Citigroup lent Enron $2.4 billion in a series of deals identified as "swaps" and nicknamed Delta transactions because they were conducted through Citigroup's Cayman Island unit, called Delta. Citigroup paid Enron hundreds of millions of dollars each time, obligating the company to repay the cash over five years.
Although the transactions were in fact loans, they were never disclosed as such on Enron's books. The plaintiffs alleged that Enron was seeking to conceal the full amount of its debt so that regulators and investors would be unaware of its precarious financial position.
Based on its investment grade rating at the time, Enron could have gotten credit at much lower rates, but it paid Citigroup and JPMorgan 6.5% to 7% for the "disguised loans," making the deals hugely profitable for the banks, the plaintiffs said.
In late 2001, after revelations about Enron's accounting made headlines, Citigroup and JPMorgan unsuccessfully sought to arrange the company's sale to rival Dynegy Inc. so they could split a $90-million investment banking fee and stave off its likely bankruptcy. The suit said calls to credit rating firm Moody's Investors Service by Robert E. Rubin, a former Treasury secretary who was then Citigroup's vice chairman, and by JPMorgan Chairman William Harrison were attempts to "strong-arm" the firm to prevent it from downgrading Enron before a sale could be completed.
--sourceEnron settlements
Citigroup's $2-billion payment to settle claims by Enron shareholders is the largest yet in a series of deals with investors and regulators in connection with the energy trader's 2001 collapse.
August 2002: Andersen Worldwide, parent of auditor Arthur Andersen, says it will pay $32 million to settle lawsuits from Enron investors and employees.
February 2003: Merrill Lynch agrees to pay $80 million to settle a Securities and Exchange Commission investigation of its Enron dealings.
July 2003: Citigroup and JPMorgan Chase agree to pay more than $300 million to settle government charges that they helped Enron and Dynegy defraud investors.
December 2003: Canadian Imperial Bank of Commerce says it will pay $80 million to settle SEC allegations that it helped Enron inflate profit and hide debt.
July 2004: Bank of America says it will pay $69 million to settle a lawsuit by Enron investors over its role as underwriter for some debt offerings.
October 2004: Lehman Bros. says it will pay $222.5 million to settle a suit by the University of California and other investors over its role as an Enron underwriter.
January: Enron's insurance firm says it will pay $155 million to UC and other investors to settle a shareholder lawsuit. Ten former Enron directors say they also will pay $13 million out of their own pockets.
Friday: Citigroup agrees to pay investors $2 billion to settle a lawsuit that accused the bank of fraud in its work for Enron.