JP Morgan chase settle suit with Worldcom for $2 billion
The second largest financial institution in America, JP Morgan Chase & Co., has agreed to pay $2 billion to settle claims from investors who lost money in the collapse of WorldCom Inc. It was the last major bank to reach a settlement in the class action suit, though other defendants remain.
The federal court supervising the case was told yesterday that 11 former directors of WorldCom were close to reviving a deal in which they would pay millions of dollars to settle their part in the investor suit.
The JP Morgan Chase settlement came a day after WorldCom’s former chief executive, Bernard Ebbers, was found guilty of fraud, conspiracy and false regulatory filings in the $11 billion accounting fraud at WorldCom. The company collapsed in 2002, but has since emerged from bankruptcy to operate under the name MCI Inc.
New York comptroller Alan Hevesi, representing thousands of WorldCom investors as the court-appointed lead plaintiff, said that the more than a dozen banks and investment banks that have reached settlements have agreed to pay more than $6 billion - a record in a securities class action case. "I’m delighted that we are coming to closure," he told reporters. "This is a huge securities case. I think we’ve made a substantial recovery for the people that we represent."
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