El Paso Corp. (NYSE: EP), a Houston-based energy company, has announced the preliminary settlement of the securities class action (and a related derivative case) pending against the company in the S.D. of Tex. The case was originally filed in 2002 and alleges securities law violations in connection with alleged wash trades, mark-to-market accounting, off-balance sheet debt, the overstatement of natural gas and oil reserves, and manipulation of the California energy market. The settlement is for $273 million, with El Paso contributing $48 million and the balance being paid by its insurers.
The El Paso securities class action has an interesting history and has been the subject of a number of posts on The 10b-5 Daily over the years.