Citigroup Agrees to Settle Enron Class Action Litigation for $2 billion

NEW YORK – Citigroup announced today that it has agreed to a settlement in the Enron class action litigation Newby, et al. v. Enron Corp., et al., currently pending in the United States District Court for the Southern District of Texas, Houston Division.

Under the terms of the settlement, Citigroup will make a pre-tax payment of $2.0 billion to the settlement class, which consists of all purchasers of all publicly traded equity and debt securities issued by Enron and Enron-related entities between September 9, 1997 and December 2, 2001. The settlement is fully covered by Citigroup’s existing litigation reserves. The company does not plan to adjust its remaining reserves, which it considers adequate to meet all of the company’s remaining exposure to the additional pending Enron and research-related cases. The company continues to evaluate its reserves on an ongoing basis.

Charles Prince, Chief Executive Officer of Citigroup, said: “We have an ambitious agenda for Citigroup’s future growth as we continue toward our goal to be the most respected global financial services company. It is a key priority for Citigroup to resolve major cases like this one and to put a difficult chapter in our history behind us. By doing so, we will be better positioned to realize our goals. We acknowledge and appreciate the determined and professional efforts of the Regents of the University of California and its advisors in working with us to achieve a settlement that meets the goals of all parties.”

The class action settlement must be approved by the Board of Regents of the University of California, the lead plaintiff in the case, and the Board of Directors of Citigroup. It is also subject to the approval of the United States District Court for the Southern District of Texas.

The settlement amount includes plaintiffs’ attorneys’ fees, which will be determined by the Court at a later date. The settlement provides that Citigroup denies committing any violation of law and has agreed to the settlement solely to eliminate the uncertainties, burden and expense of further protracted litigation.