HOUSTON, Dec 21: A federal judge on Friday refused to release most of Enron Corp.’s investment banks from a class-action stockholder lawsuit, but she did dismiss cases against Deutsche Bank AG and the law firm Kirkland & Ellis.

US District Judge Melinda Harmon in Houston decided that eight major investments banks and Enron’s chief outside law firm, Texas legal powerhouse Vinson & Elkins, will have to defend themselves in the sprawling stock-fraud suit.

Harmon’s decision also gives the lead plaintiff, the University of California Board of Regents, access to confidential records of the banks and Enron relating to the myriad deals and partnerships the now-bankrupt Houston energy giant undertook.

That will come during the discovery phase of the suit, which had been scheduled to go to trial on Dec. 1, 2003, but will be delayed.

Lawyers for the UC Board were granted the delay on Tuesday after telling the court they expected to add more defendants to the suit once they learn the identities of parties involved in Enron’s shady off-balance-sheet partnerships.

The banks still in the suit are Merrill Lynch & Co. Inc. J.P. Morgan Chase & Co. Inc Credit Suisse First Boston, Citigroup Inc, Barclays Bank Plc, Canadian Imperial Bank of Commerce, Bank of America Corp. and Lehman Bros. Holdings Inc.

Merrill, J.P. Morgan Chase, Citigroup and CSFB were among 10 investment houses that agreed to pay $1.4 billion and accept new rules of conduct as part of a settlement Friday regarding along-running government probe into charges that Wall Street’s research is biased by investment banking interests.

The long-awaited deal to settle a host of regulatory investigations was sparked by the fall of Enron, which brought scrutiny to the fact that Wall Street banks issued overly optimistic research reports that misled investors.

The lawsuit alleges the banks pumped up Enron stock with rosy analyst recommendations and enriched themselves while engaging in deals that ultimately destroyed the company.

Vinson & Elkins said in a statement that the allegations against it were untrue and that it would be exonerated.

Enron’s former auditor, the all-but-defunct Andersen, is also still in the suit. The Chicago-based firm was convicted of obstruction of justice in June for destroying Enron-related documents.

Kirkland and Ellis had advised some of the outside partnerships that were later seen as a root cause of Enron’s fall. Deutsche Bank AG was among the many banks that did work for Enron.

The University of California was named lead plaintiff largely based on the size of its loss, which was almost $145 million.—Reuters