States Side with Enron Shareholders in Class Action Lawsuit

California and 29 other states have taken the side of Enron Corp. shareholders seeking damages from big investment banks in a federal case over the banks' alleged role in Enron's accounting fraud.

Attorneys general from the 30 states used the SEC's legal arguments in 2002 Enron litigation to make the case that Merrill, Credit Suisse, and the other investment banks should be held liable as participants in accounting fraud.

The lawsuit on behalf of Enron shareholders seeks billions of dollars in damages from the investment banks. The federal judge presiding over the litigation, U.S. District Judge Melinda Harmon in Houston, has granted it status to proceed as a class-action suit. (http://www.latimes.com/business/la-fi-wrap10.1jan10,1,1406010.story?coll=la-mininav-business)