Citigroup finally settled over its role in helping the E lie to investors, the NYT says on C3. Citi will fork over $1.66 billion it can ill afford at the moment to the Enron Bankruptcy Estate, though it’s long had reserves set aside for the possibility of such a payout.

The WSJ says on C4 that:

“It represents a huge step toward the final settlement of litigation Enron brought against 11 banks, accusing them of conspiring with former Enron officials to manipulate the energy company’s finances. Enron says the banks helped set up structured finance transactions with Enron that buried the company in debt, forcing it into bankruptcy.”

The NYT says Citi has “so far” paid out more than $4 billion for its role in the Enron debacle, but still has another $1.5 billion in claims against it from a “group of several other big banks that has accused Citigroup of being deceitful about Enron’s finances in its role as principal agent for the group.”

The FT reports more bad Citi news. On-the-money analyst Meredith Whitney says the bank may have to take another $11 billion in write-downs this quarter and it faces lawsuits over its underwriting of mortgage-backed securities.

Citizen Meriwether

The WSJ reports on C1 that a founder of the infamous Long Term Capital Management, the hedge fund that nearly brought global financial markets to their knees a decade ago, is against getting his butt handed to him.

John Meriwether’s biggest fund is down 28 percent so far this year (the average hedge fund is down 3.4 percent) after trailing markets last year, and investors are trying to bail out.

Mr. Meriwether and his colleagues at JWM Partners LLC—which he launched in 1999 with LTCM alumni—are trying to reassure investors in the two funds that they have slashed risk and will use their experience to survive this market crisis, preserving about $1.4 billion in assets.

The struggles represent a warning signal to investors that the perils of the current crisis aren’t over despite lower market values and government efforts to calm the financial system.

This guy just can’t keep away from bad press:

One of Wall Street’s best-known traders, Mr. Meriwether was featured prominently in the book “Liar’s Poker,” which depicted the antics of Salomon’s bond traders. His LTCM hedge fund, located in Greenwich, Conn., included Nobel Prize winners and math whizzes, but it was undone in 1998 by massive “leverage,” or borrowing—up to $50 for every dollar invested—which amplified losses when the markets turned on him.

Mr. Meriwether’s recent troubles partly stem from borrowing. His bond fund had $14.90 in borrowed money for every $1 in equity at the end of February, according to the March 18 letter. Although far lower than at LTCM, the fund’s risk level, which includes leverage, was still too much for this year’s volatile environment, he and his fund managers have acknowledged in conversations with investors.

How do we invest our money with this guy?

Icahn wants more

Investor Carl Icahn won his long battle to split Motorola into two companies, but that’s not satisfying the billionaire, who says he’ll still fight to take four board seats, the WSJ says on B1. The NYT puts it on C1 and reports that the company will divide its struggling cell phone maker from the rest of its business by 2009.

A whimper

In economic news, the fourth-quarter GDP report is due from the Commerce Department this morning. A Bloomberg survey predicts it grew just 0.6 percent.

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