Status: Settled 2006
Amount: $7.2 billion
Investors in Enron corporate stock filed lawsuits under both federal and state securities laws against Enron Corporation, individual Enron officers and directors, Enron’s accountant Arthur Anderson, individual Arthur Anderson partners and employees, and Enron’s former law firm Vinson & Elkins.
The lawsuit’s primary contention was that Enron engaged in fraud by concealing from investors losses by Enron-controlled special purpose entities (the Raptors). Because Enron’s primary corporate losses were attributed to these entities, those losses were not disclosed in annual reports or SEC filings.
In total, the $7.2 billion in settlements reached by Enron to compensate shareholders whose stock became worthless during the company collapse is the largest payout to date in a shareholder securities class action.