Banks Fined $255M In Enron Scam

J.P. Morgan Chase and Citigroup will pay fines totaling $255 million, settling allegations the two banks helped Enron disguise loans, officials announced Monday.

The Securities and Exchange Commission said the settlement resolves charges growing out of the so-called structured financing arrangements -- later determined to be loans -- that the banks provided to Enron.

"Each institution helped Enron mislead its investors by characterizing what were essentially loan proceeds as cash from operating activities," the SEC said in a prepared statement.

"The proceeding against Citigroup also resolves the commission's charges stemming from the assistance Citigroup provided Dynegy Inc. in manipulating that company's financial statements through similar conduct."

J.P. Morgan Chase will pay $135 million while Citigroup will pay $120 million. Both firms settled without admitting or denying guilt.

The SEC said the fines collected will be paid to Enron and Dynegy fraud victims. Enron victims will get $236 million, and Dynegy victims will get
$19 million.