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Administration March 8, 2005
Arthur Andersen Signs on to $25M Global Crossing Settlement
August 3, 2005 (PLANSPONSOR.com) - Now defunct
auditor Arthur Andersen has settled an investor lawsuit about
its role in the financial implosion of Global Crossing as
part of a $25 million deal, plaintiffs' lawyers
reported.
Reported by Fred Schneyer
The investors accused Global Crossing, a telecommunications network provider, its former officers and directors, and advisers of falsifying financial filings to hide losses, Reuters reported. The lead plaintiffs, the Public Employees Retirement System of Ohio and the State Teachers Retirement System of Ohio claimed they lost more than $110 million.
Global Crossing, founded by Gary Winnick, turned to a US Bankruptcy Court for protection from its creditors in January 2002 after struggling with too much debt and undersea fiber-optic cable capacity and amid doubts raised about its accounting practices. The company emerged from Bankruptcy Court in December 2003.
Last March, Winnick and some former officers and directors agreed to pay $325 million to settle investor lawsuits (See Global Crossing Settlement Gets Court OK ). The latest contributions brought the total recovery by shareholders and employees of Global Crossing to $425 million, $345 million of that from the securities class action, the Grant & Eisenhofer law firm said.
Meanwhile, the federal judge overseeing the Global Crossing securities fraud class action has given approval to a $75 million settlement from Citigroup for its role as a Global Crossing financial adviser, the law firm said.
Citigroup, which was one of Global Crossing’s bankers, was accused of issuing inflated research reports and failing to disclose conflicts of interest.