A federal judge approved legal settlements that will give $3.5 billion to WorldCom Inc.
investors who claimed banks including JPMorgan Chase & Co. and accountant Arthur Andersen defrauded them.
Today’s ruling by U.S. District Judge Denise Cote in New York raises to $6.1 billion the amount that WorldCom investors will recover after suing over a fraud that led to the largest bankruptcy in U.S. history. In November, Cote approved a related $2.6 billion settlement against Citigroup Inc.
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The total $6.1 billion recovery is the second largest ever in a securities fraud lawsuit, eclipsed only by settlements in litigation involving Enron Corp. An estimated 1 million WorldCom investors may begin collecting money in mid-2006, Sean Coffey, a lawyer for the investors, said.
“The 2005 settlements are, in virtually each instance, of historic proportions,” Cote said in an opinion today.
The case is In Re WorldCom Securities Litigation, 02-3288, U.S. District Court for the Southern District of New York.
