agreed Friday to pay $225 million to
shareholders to settle allegations arising from the company's 2001 insolvency.
The settlement, which had been expected, stems from Lehman's role as an underwriter of some Enron bond offerings.
Lehman is the second bank to reach a deal with Enron shareholders in a massive class-action lawsuit filed shortly after the company's December 2001 bankruptcy filing. Earlier,
Bank of America
agreed to pay $69 million to settle shareholder claims against it.
"This agreement continues a pattern of highly favorable settlements with underwriter defendants and provides a substantial recovery to the purchasers of the Enron debt securities that Lehman Brothers participated in underwriting," said James E. Holst, general counsel for the University of California, the lead plaintiff in the Enron ligitation.
The litigation, however, is far from over. Shareholders are still pursuing claims against other Enron banks, including
J.P. Morgan Chase
Canadian Imperial Bank of Commerce
, all of which allegedly played a role in helping Enron cook its books. By comparison, BofA and Lehman were not charged with helping the company manipulate its earnings.
When the Enron class action is all said and done, legal experts predict the total payout by Wall Street banks will range between $5 billion and $10 billion.