Lehman Brothers Inc., Credit Suisse First Boston LLC, Goldman, Sachs & Co. and UBS Warburg LLC agreed to pay a total of $100.3 million to settle securities fraud charges relating to a bond offering for telecommunications firm WorldCom, confirmed John Chartier, spokesman for New York state Comptroller Alan G. Hevesi, lead plaintiff in the case. Mr. Hevesi is the sole trustee of the $117.5 billion New York State Common Retirement Fund, Albany.
The settlement comes one day after Bank of America Corp. agreed to pay $460.5 million to settle similar charges. Bank of America was an underwriter for two WorldCom bond offerings.
Under today's settlement, Lehman Brothers will pay $62.7 million, and the other three banks will pay $12.5 million each. Kerrie Cullen, spokeswoman for Lehman Brothers; Victoria Harmon, spokeswoman for CSFB; and Michael DuVally, spokesman for Goldman Sachs, all declined comment. Allison Chin-Leong, a spokeswoman for UBS, said the firm settled "to eliminate uncertainties, expenses and the disruption of further litigation" and said the firm denied that it violated any laws in connection with the bond offering.
Mr. Chartier said 10 banks that participated in underwriting the WorldCom bonds have not settled. The trial, in which those banks, WorldCom accountant Arthur Andersen and WorldCom directors are defendants, is scheduled to begin March 21.