⚖️ Enron investors won $7.2B from banks in a record settlement

A shareholder sued Nvidia and CEO Jensen Huang on Monday in a California court, accusing them of misleading investors in their responses to reports about Huang's relationship with a woman those reports say is suspected of working for Chinese intelligence, AP reports. The complaint, filed by retail investor Mark Kistenmacher, seeks unspecified damages and a jury trial on behalf of anyone who bought Nvidia shares from October 9 to November 8. Nvidia had not immediately responded to AP's request for comment. Huang has acknowledged the affair and apologized in an open letter posted on Nvidia's website, AP reports.

None of this has been tested in court. Earlier, AP reports, Nvidia said its compliance team had checked and found Megaspeed, the Singapore company at the center of the reports, was not doing anything illegal. The complaint says those statements were misleading. AP also reports Nvidia shares fell 4.3% on Monday, about $190B of market value. A class action turns on what a court decides, so here is the yardstick: the record payout.

The record Enron set

"Getting here has required a long, challenging effort, but the results for Enron investors are unprecedented."

Charles Robinson, University of California general counsel, in a UC Newsroom statement, December 2008

UC said distribution began December 19, 2008, with almost $5B of the $7B going to about 200,000 victims. It said further payments were anticipated, with timing and amounts to be determined, and that claims remained pending against other defendants, including Barclays Bank, Credit Suisse First Boston and Merrill Lynch.

Banks versus insurers

For the $7.2B, the Chronicle names financial institutions as the payers. The documents read do not split that sum by bank or show any insurer share. The insurer picture appears in Enron's separate employee retirement-plan case. The Times of London reported that former employees were awarded $85M as a partial settlement, covered by two insurance policies underwritten by AEGIS and FIC. The Houston Chronicle reported that a further $37.5M deal with Northern Trust, which neither admits nor denies the allegations, brought the total collected for employees to $264.3M.

WorldCom and Tyco: the missing rungs

The Guardian reported that a federal jury in Manhattan found WorldCom founder Bernard Ebbers guilty of conspiracy, securities fraud and false regulatory filings in March 2005. That is a criminal verdict, not a shareholder payout. The papers read for WorldCom and Tyco International carry no class action settlement figure, so this list ranks one case and leaves the rest blank rather than guess.

MrMoney's reading, then: Enron set the bar at $7.2B and about seven years of litigation. Nvidia's suit has filed a number of zero and a name or two. If you are waiting for a payout, the record suggests patience.