Business & Finance
Lehman Brothers Holdings Inc. is close to paying $220 million to settle a class-action lawsuit stemming from the collapse of Enron, The Wall Street Journal reported. The payout would go to shareholders who lost billions when the energy trader went bankrupt three years ago. The lawsuit alleges that the New York investment bank colluded with other brokerages to mislead shareholders in the Enron debacle. In July, Bank of America agreed to a similar settlement that cost it $69 million, and the Journal said the other brokerages - notably Citigroup and JPMorgan Chase - have set aside billions of dollars to cover their possible liability. A Lehman Brothers spokes-man told the Journal that his company did not expect any settlement to have an impact on its financial health.
Fannie Mae, the giant government-sponsored mortgage company, said it is taking steps to respond to a finding of serious accounting problems that has led to a preliminary inquiry by the Securities and Exchange Commission. The finding, in a report released on the Internet Wednesday after an eight-month investigation by the Office of Federal Housing Enterprise Oversight, described a pervasive pattern of earnings manipulation, lax internal controls, and a corporate culture "that emphasized stable earnings at the expense of accurate financial disclosures." Fannie Mae's board has named a special committee of outside directors to respond to the allegations.
After weeks of warnings, Yukos, the beleaguered Russian oil giant, finally cut production because of its staggering tax obligations. Yukos is being pressured for $7.5 billion in unpaid taxes and penalties for 2000 and 2001 and is expected to be presented with bills for still more money for 2002 and 2003. But senior executives of the company insisted Wednesday that they wouldn't file for bankruptcy because the authorities could challenge such a move as illegal and subject its employees to criminal investigations. The Interfax news agency reported Thursday that Yukos's output fell by 2 percent, or 35,000 barrels a day. The company also announced a 100,000 barrel-a-day cut in oil deliveries to energy-hungry China as a means of saving money on rail transportation, but the latter's National Petroleum Corp. said it would cover such costs at least through October. Meanwhile, the state-owned Russian Railways said it plans to spend $1 billion to build a new line and improve existing trackage to better facilitate oil shipments to China.