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Telecommunications
10 min read
Areas of Expertise :
Finance, Accounting, Forensic Accounting, Corporate Governance, Securities
Published Date:
Last Modified Date:
Jurisdiction:
Federal. Second Circuit
In In re WorldCom, Inc. Securities Litigation (S.D.N.Y., Judge Denise L. Cote), investors alleged that WorldCom inflated earnings and misled the market through SEC filings and bond registration statements during the class period of April 29, 1999, through June 25, 2002. On June 25, 2002, WorldCom disclosed that it had improperly capitalized more than $3.8 billion in line costs and later revealed additional reserve manipulations. The company also indicated a likely goodwill write-off and filed for bankruptcy on July 21, 2002. The defendants included former executives, directors, Arthur Andersen, and underwriters associated with the May 2000 and May 2001 offerings. Judge Cote’s opinions, Stanford’s Securities Class Action Clearinghouse, and lead counsel BLB&G identify these defendant groups and the accounting issues at the center of the litigation.
After consolidation in 2002, the court largely denied the defendants’ motions to dismiss on May 19, 2003, and certified the investor class on October 24, 2003. Those rulings were followed by a series of 2005 settlements, including J.P. Morgan’s $2 billion payment and multiple underwriter and director agreements. Final judgment entered on or around September 22, 2005, with approximately $6.1 billion recovered for investors; lead counsel later reported total recoveries of more than $6.15 billion. For litigators and researchers conducting fraud examinations, the opinion at 294 F. Supp. 2d 392 provides detailed discussion of the accounting practices at issue, including line costs, reserve use, and goodwill treatment. The class-certification opinion at 219 F.R.D. 267 addresses the certified investor class and related Rule 23 issues.
Investors filed the first securities class action alleging that WorldCom’s SEC filings and offering documents misrepresented the company’s financial results. The filing began the securities litigation that later proceeded before Judge Denise L. Cote in the Southern District of New York. Stanford’s case record lists April 30, 2002, as the filing date and tracks the matter through consolidation, class certification, settlement, and final judgment.
WorldCom disclosed that it had improperly treated more than $3.8 billion in line costs as capital expenditures and would restate results for 2001 and the first quarter of 2002. The company later acknowledged additional reserve-related overstatements affecting earlier periods. The disclosure triggered sharp market declines and became central to Section 11, Section 12(a)(2), and Exchange Act allegations. From a fraud-examination perspective, reclassifying ordinary line costs into capital accounts is a recognizable accounting red flag because it reduces reported expenses and inflates EBITDA.
Less than a month after the restatement announcement, WorldCom filed what was then the largest bankruptcy in U.S. history. The bankruptcy provided context for investor-loss allegations and claims against former executives, directors, Arthur Andersen, and underwriting banks. From a fraud-examination perspective, the short period between public disclosure and bankruptcy showed how quickly concealed accounting irregularities could affect market confidence once revealed.
On August 12, 2002, Judge Denise L. Cote appointed the New York State Common Retirement Fund as Lead Plaintiff and approved BLB&G as Co-Lead Counsel. By order dated August 15, 2002, related securities class actions were consolidated in the Southern District of New York. Consolidation allowed the investor claims to proceed through coordinated rulings and discovery.
The court partially lifted the PSLRA discovery stay and required production of materials previously provided to Congress, the SEC, and a grand jury. The order gave the class access to evidence already collected in government and congressional inquiries while the securities litigation continued. BLB&G’s case history records the order and its effect on pretrial progress.
Judge Cote largely denied the defendants’ motions to dismiss, allowing core Securities Act and Exchange Act claims to proceed against former executives, directors, and underwriters tied to the May 2000 and May 2001 offerings. Arthur Andersen’s separate motion to dismiss was addressed later, on June 24, 2003, when the court denied Arthur Andersen LLP’s motion but granted dismissal motions filed by related Andersen entities and individuals. The May 19 opinion discusses the alleged accounting methods at issue, including line costs, reserve practices, and goodwill treatment.
The court consolidated numerous related individual actions with the class action for pretrial purposes. The related cases involved overlapping facts and legal questions arising from WorldCom’s bond offerings. Consolidation helped align motion practice and discovery across the class and individual investor actions.
The court certified a class covering purchases or acquisitions of publicly traded WorldCom securities from April 29, 1999, through June 25, 2002. Certification affected settlement negotiations by allowing the investor claims to proceed on a class-wide basis. Stanford’s record confirms certification and later opt-out procedures.
Lead Counsel announced a $2.575 billion settlement with Citigroup-related defendants. At the time, the payment was described as a record third-party settlement in a securities class action. The case history also notes broad media coverage and its role in the later settlement sequence.
A series of settlements followed in March 2005: Bank of America ($460.5 million, March 3); Lehman, CSFB, Goldman, and UBS (approximately $100 million total, March 5); ABN Amro ($278 million), Mitsubishi ($75 million), BNP and Mizuho ($37.5 million each, March 9); Deutsche Bank ($325 million), WestLB ($75 million), and Caboto ($37.5 million, March 10); Utendahl (March 17); former directors ($55.25 million, including $20.25 million paid personally, March 18); and the final former director ($4.5 million, March 22). These agreements increased total recoveries before final judgment.
J.P. Morgan agreed to pay $2 billion to resolve investor claims tied to its role underwriting WorldCom bonds. The settlement was one of the largest single-defendant payments in the action. Stanford’s chronology records the agreement within the broader March 2005 settlement sequence.
The court set a September 9, 2005, fairness hearing covering settlements and plans of allocation. Final judgment entered on or around September 22, 2005, resolving the civil securities class action through court-approved settlements. By that point, settlements totaled approximately $6.1 billion, and Lead Counsel later reported more than $6.15 billion recovered for the class, with an additional $38 million recovered in 2012 under a contingent clause. Monetary recoveries were distributed under the court-approved plan of allocation.
Court:
United States District Court for the Southern District of New York
Case Name:
In re WorldCom, Inc. Securities Litigation
Accounting Fraud
Fraud Examination
Generally Accepted Accounting Principles GAAP
Generally Accepted Auditing Standards GAAS
Securities Fraud
Securities Class Action
Securities Litigation
SEC Reporting
Financial Reporting
Corporate Bankruptcy
In In re WorldCom, Inc. Securities Litigation (S.D.N.Y., Judge Denise L. Cote), investors alleged that WorldCom inflated earnings and misled the market through SEC filings and bond registration statements during the class period of April 29, 1999, through June 25, 2002. On June 25, 2002, WorldCom disclosed that it had improperly capitalized more than $3.8 billion in line costs and later revealed additional reserve manipulations. The company also indicated a likely goodwill write-off and filed for bankruptcy on July 21, 2002. The defendants included former executives, directors, Arthur Andersen, and underwriters associated with the May 2000 and May 2001 offerings. Judge Cote’s opinions, Stanford’s Securities Class Action Clearinghouse, and lead counsel BLB&G identify these defendant groups and the accounting issues at the center of the litigation.
After consolidation in 2002, the court largely denied the defendants’ motions to dismiss on May 19, 2003, and certified the investor class on October 24, 2003. Those rulings were followed by a series of 2005 settlements, including J.P. Morgan’s $2 billion payment and multiple underwriter and director agreements. Final judgment entered on or around September 22, 2005, with approximately $6.1 billion recovered for investors; lead counsel later reported total recoveries of more than $6.15 billion. For litigators and researchers conducting fraud examinations, the opinion at 294 F. Supp. 2d 392 provides detailed discussion of the accounting practices at issue, including line costs, reserve use, and goodwill treatment. The class-certification opinion at 219 F.R.D. 267 addresses the certified investor class and related Rule 23 issues.
Investors filed the first securities class action alleging that WorldCom’s SEC filings and offering documents misrepresented the company’s financial results. The filing began the securities litigation that later proceeded before Judge Denise L. Cote in the Southern District of New York. Stanford’s case record lists April 30, 2002, as the filing date and tracks the matter through consolidation, class certification, settlement, and final judgment.
WorldCom disclosed that it had improperly treated more than $3.8 billion in line costs as capital expenditures and would restate results for 2001 and the first quarter of 2002. The company later acknowledged additional reserve-related overstatements affecting earlier periods. The disclosure triggered sharp market declines and became central to Section 11, Section 12(a)(2), and Exchange Act allegations. From a fraud-examination perspective, reclassifying ordinary line costs into capital accounts is a recognizable accounting red flag because it reduces reported expenses and inflates EBITDA.
Less than a month after the restatement announcement, WorldCom filed what was then the largest bankruptcy in U.S. history. The bankruptcy provided context for investor-loss allegations and claims against former executives, directors, Arthur Andersen, and underwriting banks. From a fraud-examination perspective, the short period between public disclosure and bankruptcy showed how quickly concealed accounting irregularities could affect market confidence once revealed.
On August 12, 2002, Judge Denise L. Cote appointed the New York State Common Retirement Fund as Lead Plaintiff and approved BLB&G as Co-Lead Counsel. By order dated August 15, 2002, related securities class actions were consolidated in the Southern District of New York. Consolidation allowed the investor claims to proceed through coordinated rulings and discovery.
The court partially lifted the PSLRA discovery stay and required production of materials previously provided to Congress, the SEC, and a grand jury. The order gave the class access to evidence already collected in government and congressional inquiries while the securities litigation continued. BLB&G’s case history records the order and its effect on pretrial progress.
Judge Cote largely denied the defendants’ motions to dismiss, allowing core Securities Act and Exchange Act claims to proceed against former executives, directors, and underwriters tied to the May 2000 and May 2001 offerings. Arthur Andersen’s separate motion to dismiss was addressed later, on June 24, 2003, when the court denied Arthur Andersen LLP’s motion but granted dismissal motions filed by related Andersen entities and individuals. The May 19 opinion discusses the alleged accounting methods at issue, including line costs, reserve practices, and goodwill treatment.
The court consolidated numerous related individual actions with the class action for pretrial purposes. The related cases involved overlapping facts and legal questions arising from WorldCom’s bond offerings. Consolidation helped align motion practice and discovery across the class and individual investor actions.
The court certified a class covering purchases or acquisitions of publicly traded WorldCom securities from April 29, 1999, through June 25, 2002. Certification affected settlement negotiations by allowing the investor claims to proceed on a class-wide basis. Stanford’s record confirms certification and later opt-out procedures.
Lead Counsel announced a $2.575 billion settlement with Citigroup-related defendants. At the time, the payment was described as a record third-party settlement in a securities class action. The case history also notes broad media coverage and its role in the later settlement sequence.
A series of settlements followed in March 2005: Bank of America ($460.5 million, March 3); Lehman, CSFB, Goldman, and UBS (approximately $100 million total, March 5); ABN Amro ($278 million), Mitsubishi ($75 million), BNP and Mizuho ($37.5 million each, March 9); Deutsche Bank ($325 million), WestLB ($75 million), and Caboto ($37.5 million, March 10); Utendahl (March 17); former directors ($55.25 million, including $20.25 million paid personally, March 18); and the final former director ($4.5 million, March 22). These agreements increased total recoveries before final judgment.
J.P. Morgan agreed to pay $2 billion to resolve investor claims tied to its role underwriting WorldCom bonds. The settlement was one of the largest single-defendant payments in the action. Stanford’s chronology records the agreement within the broader March 2005 settlement sequence.
The court set a September 9, 2005, fairness hearing covering settlements and plans of allocation. Final judgment entered on or around September 22, 2005, resolving the civil securities class action through court-approved settlements. By that point, settlements totaled approximately $6.1 billion, and Lead Counsel later reported more than $6.15 billion recovered for the class, with an additional $38 million recovered in 2012 under a contingent clause. Monetary recoveries were distributed under the court-approved plan of allocation.
Fraud Examination Expert Witness
Fraud examination experts may be used to analyze how large-scale financial schemes are carried out, concealed, and reflected in company records. In the WorldCom litigation, the central accounting issues included the improper capitalization of more than $3.8 billion in line costs and manipulation of reserves, both of which inflated reported earnings. A fraud examination expert could trace those accounting irregularities, reconstruct the related financial flows, and explain how the practices affected investor understanding and securities values.
Generally Accepted Accounting Principles (GAAP) Expert Witness
GAAP expert witnesses address whether financial statements comply with Generally Accepted Accounting Principles and explain the technical effect of departures from those standards. In WorldCom, the alleged departures included goodwill misstatement, merger-reserve manipulation, and misclassification of line costs. A GAAP expert could help connect those accounting treatments to reported earnings, investor disclosures, and the financial statements used in the company’s SEC filings and bond offering materials.
Generally Accepted Auditing Standards (GAAS) Expert Witness
GAAS expert witnesses evaluate whether audit work followed Generally Accepted Auditing Standards, including standards for planning, fieldwork, and reporting. In litigation involving WorldCom’s financial statements, this type of expert could review audit procedures, examine whether warning signs were addressed, and explain how audit decisions affected the reliability of the reported financial information. That analysis may also assist the court in assessing issues tied to Arthur Andersen’s role as WorldCom’s outside auditor.
Securities Fraud Expert Witness
Securities fraud expert witnesses analyze alleged misrepresentations, disclosure failures, and market effects in securities litigation. In the WorldCom case, investor claims centered on inflated earnings, misleading SEC filings, and alleged omissions in bond offering documents. A securities fraud expert could explain how those disclosures related to federal securities-law claims, investor reliance issues, and claimed market losses.
Corporate Governance Expert Witness
Corporate governance experts evaluate board oversight, audit-committee practices, and internal-control responsibilities. In WorldCom, director defendants and audit committee members faced allegations that they failed to detect massive financial misstatements despite their oversight roles. A corporate governance expert could assess whether oversight practices, reporting channels, and internal controls functioned in a manner consistent with accepted governance standards.
Lead Plaintiff Selection and Early Coordination
An institutional lead plaintiff can provide organized class leadership in complex securities litigation. In WorldCom, the New York State Common Retirement Fund was appointed as Lead Plaintiff, and related actions were consolidated shortly afterward. That structure allowed the investor claims to proceed through unified strategy, coordinated discovery, and centralized motion practice.
Targeted Relief from the PSLRA Discovery Stay
When key evidence has already been produced to regulators or Congress, a narrowly tailored request for relief from the PSLRA discovery stay can give plaintiffs earlier access to records without disregarding statutory limits. The court’s November 21, 2002, order required production of materials previously provided to Congress, the SEC, and a grand jury. That ruling gave the class access to key documents while the securities litigation moved through pretrial proceedings.
Fraud Examination as a Litigation Tool
WorldCom shows how fraud-examination principles can translate accounting practices into evidence that courts and litigants can evaluate. The alleged reclassification of ordinary line costs into capital accounts reduced reported expenses and inflated earnings and EBITDA. By tracing those entries and connecting them to securities disclosures, fraud-examination analysis can clarify how accounting irregularities affected investor understanding.
Sequenced Settlements and Defendant-Specific Resolution
WorldCom’s settlement history shows how large securities actions can resolve through a sequence of defendant-specific agreements rather than a single global settlement. Successive agreements with major financial institutions, directors, and other defendants increased aggregate recovery before final judgment. The settlement sequence also allowed the case to move toward resolution while accounting for each defendant group’s role in the bond offerings and disclosures.
Plan of Allocation and Case Closure
Final approval and a clear plan of allocation are central to distributing recoveries across a large investor class. By September 2005, the litigation reached final judgment, with settlements totaling approximately $6.1 billion and later reported as exceeding $6.15 billion. The court-approved allocation process provided the framework for distributing monetary recoveries to eligible class members.
The WorldCom Securities Litigation was resolved through one of the largest securities-fraud recoveries in U.S. history, with settlements totaling approximately $6.1 billion and later reported by lead counsel as exceeding $6.15 billion. The litigation centered on allegations that WorldCom inflated earnings through accounting practices that included improper capitalization of more than $3.8 billion in line costs, reserve manipulation, and goodwill-related disclosures, while investors pursued claims tied to SEC filings and bond offering materials. From a fraud-examination perspective, the case shows how ordinary operating expenses, reserve accounts, audit evidence, and disclosure records can be traced together to evaluate whether reported financial results matched the company’s underlying business activity. The court’s rulings on dismissal, class certification, PSLRA discovery, and settlement approval also provide a detailed record of how accounting evidence, securities-law claims, underwriter liability, and investor recovery were addressed in a large public-company restatement case.
What is the WorldCom Securities Litigation?
In re WorldCom, Inc. Securities Litigation was a securities class action in the Southern District of New York before Judge Denise L. Cote. The case addressed alleged misstatements in WorldCom’s SEC filings and offering documents tied to WorldCom securities and bond offerings. It was resolved through court-approved settlements, with final judgment entered on or around September 22, 2005.
When did WorldCom disclose the accounting issues that triggered the case?
On June 25, 2002, WorldCom announced that it had improperly capitalized more than $3.8 billion in ordinary line costs and would restate results for 2001 and the first quarter of 2002. The company later acknowledged reserve-related overstatements affecting earlier periods. WorldCom filed for bankruptcy on July 21, 2002.
What was the WorldCom class period?
The certified class period covered purchases or acquisitions of publicly traded WorldCom securities from April 29, 1999, through June 25, 2002. That period is identified in the case materials and class-certification record.
Which bond offerings were at issue in the litigation?
The litigation involved four WorldCom bond offerings: the August 1998 offering of more than $6 billion, the May 12, 2000 offering of $5 billion, the December 2000 private placement of approximately $2 billion, and the May 9, 2001 offering of $11.8 billion. Claims included Section 11 allegations tied to the 1998, May 2000, and 2001 offerings, along with a Section 12(a)(2) claim related to the December 2000 private placement.
Who served as Lead Plaintiff, and when were the actions consolidated?
Judge Cote appointed the New York State Common Retirement Fund as Lead Plaintiff on August 12, 2002. The related securities class actions were consolidated for pretrial purposes by order dated August 15, 2002.
Fraud Examination Expert Witness
Fraud examination experts may be used to analyze how large-scale financial schemes are carried out, concealed, and reflected in company records. In the WorldCom litigation, the central accounting issues included the improper capitalization of more than $3.8 billion in line costs and manipulation of reserves, both of which inflated reported earnings. A fraud examination expert could trace those accounting irregularities, reconstruct the related financial flows, and explain how the practices affected investor understanding and securities values.
Generally Accepted Accounting Principles (GAAP) Expert Witness
GAAP expert witnesses address whether financial statements comply with Generally Accepted Accounting Principles and explain the technical effect of departures from those standards. In WorldCom, the alleged departures included goodwill misstatement, merger-reserve manipulation, and misclassification of line costs. A GAAP expert could help connect those accounting treatments to reported earnings, investor disclosures, and the financial statements used in the company’s SEC filings and bond offering materials.
Generally Accepted Auditing Standards (GAAS) Expert Witness
GAAS expert witnesses evaluate whether audit work followed Generally Accepted Auditing Standards, including standards for planning, fieldwork, and reporting. In litigation involving WorldCom’s financial statements, this type of expert could review audit procedures, examine whether warning signs were addressed, and explain how audit decisions affected the reliability of the reported financial information. That analysis may also assist the court in assessing issues tied to Arthur Andersen’s role as WorldCom’s outside auditor.
Securities Fraud Expert Witness
Securities fraud expert witnesses analyze alleged misrepresentations, disclosure failures, and market effects in securities litigation. In the WorldCom case, investor claims centered on inflated earnings, misleading SEC filings, and alleged omissions in bond offering documents. A securities fraud expert could explain how those disclosures related to federal securities-law claims, investor reliance issues, and claimed market losses.
Corporate Governance Expert Witness
Corporate governance experts evaluate board oversight, audit-committee practices, and internal-control responsibilities. In WorldCom, director defendants and audit committee members faced allegations that they failed to detect massive financial misstatements despite their oversight roles. A corporate governance expert could assess whether oversight practices, reporting channels, and internal controls functioned in a manner consistent with accepted governance standards.
Lead Plaintiff Selection and Early Coordination
An institutional lead plaintiff can provide organized class leadership in complex securities litigation. In WorldCom, the New York State Common Retirement Fund was appointed as Lead Plaintiff, and related actions were consolidated shortly afterward. That structure allowed the investor claims to proceed through unified strategy, coordinated discovery, and centralized motion practice.
Targeted Relief from the PSLRA Discovery Stay
When key evidence has already been produced to regulators or Congress, a narrowly tailored request for relief from the PSLRA discovery stay can give plaintiffs earlier access to records without disregarding statutory limits. The court’s November 21, 2002, order required production of materials previously provided to Congress, the SEC, and a grand jury. That ruling gave the class access to key documents while the securities litigation moved through pretrial proceedings.
Fraud Examination as a Litigation Tool
WorldCom shows how fraud-examination principles can translate accounting practices into evidence that courts and litigants can evaluate. The alleged reclassification of ordinary line costs into capital accounts reduced reported expenses and inflated earnings and EBITDA. By tracing those entries and connecting them to securities disclosures, fraud-examination analysis can clarify how accounting irregularities affected investor understanding.
Sequenced Settlements and Defendant-Specific Resolution
WorldCom’s settlement history shows how large securities actions can resolve through a sequence of defendant-specific agreements rather than a single global settlement. Successive agreements with major financial institutions, directors, and other defendants increased aggregate recovery before final judgment. The settlement sequence also allowed the case to move toward resolution while accounting for each defendant group’s role in the bond offerings and disclosures.
Plan of Allocation and Case Closure
Final approval and a clear plan of allocation are central to distributing recoveries across a large investor class. By September 2005, the litigation reached final judgment, with settlements totaling approximately $6.1 billion and later reported as exceeding $6.15 billion. The court-approved allocation process provided the framework for distributing monetary recoveries to eligible class members.
The WorldCom Securities Litigation was resolved through one of the largest securities-fraud recoveries in U.S. history, with settlements totaling approximately $6.1 billion and later reported by lead counsel as exceeding $6.15 billion. The litigation centered on allegations that WorldCom inflated earnings through accounting practices that included improper capitalization of more than $3.8 billion in line costs, reserve manipulation, and goodwill-related disclosures, while investors pursued claims tied to SEC filings and bond offering materials. From a fraud-examination perspective, the case shows how ordinary operating expenses, reserve accounts, audit evidence, and disclosure records can be traced together to evaluate whether reported financial results matched the company’s underlying business activity. The court’s rulings on dismissal, class certification, PSLRA discovery, and settlement approval also provide a detailed record of how accounting evidence, securities-law claims, underwriter liability, and investor recovery were addressed in a large public-company restatement case.
What is the WorldCom Securities Litigation?
In re WorldCom, Inc. Securities Litigation was a securities class action in the Southern District of New York before Judge Denise L. Cote. The case addressed alleged misstatements in WorldCom’s SEC filings and offering documents tied to WorldCom securities and bond offerings. It was resolved through court-approved settlements, with final judgment entered on or around September 22, 2005.
When did WorldCom disclose the accounting issues that triggered the case?
On June 25, 2002, WorldCom announced that it had improperly capitalized more than $3.8 billion in ordinary line costs and would restate results for 2001 and the first quarter of 2002. The company later acknowledged reserve-related overstatements affecting earlier periods. WorldCom filed for bankruptcy on July 21, 2002.
What was the WorldCom class period?
The certified class period covered purchases or acquisitions of publicly traded WorldCom securities from April 29, 1999, through June 25, 2002. That period is identified in the case materials and class-certification record.
Which bond offerings were at issue in the litigation?
The litigation involved four WorldCom bond offerings: the August 1998 offering of more than $6 billion, the May 12, 2000 offering of $5 billion, the December 2000 private placement of approximately $2 billion, and the May 9, 2001 offering of $11.8 billion. Claims included Section 11 allegations tied to the 1998, May 2000, and 2001 offerings, along with a Section 12(a)(2) claim related to the December 2000 private placement.
Who served as Lead Plaintiff, and when were the actions consolidated?
Judge Cote appointed the New York State Common Retirement Fund as Lead Plaintiff on August 12, 2002. The related securities class actions were consolidated for pretrial purposes by order dated August 15, 2002.
How much did investors recover, and what were the major settlement milestones?
Total recoveries for the class were $6,128,056,840, often rounded to approximately $6.1 billion, and BLB&G later reported recoveries of more than $6.15 billion plus an additional $38 million in 2012. Major settlement milestones included Citigroup’s $2.575 billion settlement announced on May 11, 2004, and J.P. Morgan’s $2 billion settlement on March 16, 2005. The court held a fairness hearing on September 9, 2005, and final judgment followed on or around September 22, 2005.
Accounting Fraud
Fraud Examination
Generally Accepted Accounting Principles GAAP
Generally Accepted Auditing Standards GAAS
Securities Fraud
Securities Class Action
Securities Litigation
SEC Reporting
Financial Reporting
Corporate Bankruptcy
Cybersecurity, +4
Telecommunications
Trade Secret, +3
Telecommunications
How much did investors recover, and what were the major settlement milestones?
Total recoveries for the class were $6,128,056,840, often rounded to approximately $6.1 billion, and BLB&G later reported recoveries of more than $6.15 billion plus an additional $38 million in 2012. Major settlement milestones included Citigroup’s $2.575 billion settlement announced on May 11, 2004, and J.P. Morgan’s $2 billion settlement on March 16, 2005. The court held a fairness hearing on September 9, 2005, and final judgment followed on or around September 22, 2005.