The Fifth Circuit held that a class action lawsuit was not the appropriate vehicle to sue the banks, thereby forcing investors to file individual lawsuits. Although this effectively ends the shareholder's ability to allege that Merrill Lynch and Credit Suisse were primary participants in fraud, the lead plaintiff in the case, the University of California Board of Regents, has already negotiated settlements with Lehman Brothers, Bank of America, Citigroup, JP Morgan Chase, and CIBC, for a total of over $7 billion in recovery.
Harmon denied a motion in February, filed by defendants Merrill Lynch and Credit Suisse, to delay the trial pending the outcome of the certification appeal to the Fifth Circuit. The case is still scheduled to resume on April 16. In January, Harmon dismissed seven defendants from the class action suit, including late ex-Enron CEO Ken Lay. Lay, convicted in May of fraud and conspiracy charges for providing investors with false and misleading financial information from 1999 up until Enron filed bankruptcy in late 2001, died suddenly of a heart attack in July.