JPMorgan settlement with SEC worth over $700M

[FBaggins]

Source: AP

WASHINGTON (AP) -- JPMorgan Chase & Co. has agreed to a settlement worth more than $700 million over federal regulators' charges that it made unlawful payments to friends of public officials to win municipal bond business in Jefferson County, Ala.

The scandal over the county's $3.9 billion debt has pushed it to the brink of filing what would be the biggest municipal bankruptcy in U.S. history. The Securities and Exchange Commission on Wednesday announced the settlement with JPMorgan, which canceled interest-rate swap contracts with the county worth $700 million in March.

The Wall Street bank did not admit or deny the SEC allegations in agreeing to pay a $25 million civil fine, a $50 million payment to the county and to forfeit $647 million in termination fees it claims the county owes from the canceled swap agreements.


Read more: http://finance.yahoo.com/news/JPMorgan-settlement-with-SEC-apf-3297524178.html?x=0&sec=topStories&pos=1&asset=&ccode=

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That's gotta hurt.

[amandabeech]

1. It'd take a few trillion to get their attention and the SEC knows it.

The new head of enforcement is from Goldman.

Taking away their access to the Fed's discount window would be a better idea.

[dixiegrrrrl]

5. Bingo.

And we really have no way of knowing if the money will actually be paid.
They took TARP funds, did they pay that back?

[amandabeech]

6. I believe that they paid their TARP loans back.

However, they were one of the investment houses that purchased or created a commercial bank in order to have access to the Fed's discount window.

They are probably borrowing at the window at 0.25% using who knows what (maybe treasuries maybe junk at a discount) and then using that money to purchase higher yielding investments. It's the carry trade. And they are doing well at it.

I think that they, Goldman Sachs and other phony "banks" should have the window closed on their fingers. They're gambling with our money.

[angrycarpenter]

2. pocket change.

At least Birmingham will not have to pay millions they do not have.

[Scruffy1]

3. Pay 700 million?

So they canceled a 647 million fee, which they never would have been able to collect and had to pay 75 million, which they will take out of petty cash and walk away. Screw the S.E.C.and their settlements. We need real justice. It's always the same. They announce a settlement and the company denies wrongdoing. Look up misprisonment in a law book.

[FBaggins]

4. I wouldn't say that they would never be able to collect on the fees

Something around that amount would have been owing to whatever bank ended up backing the deal for the country. The illegal portion of the transaction (granted... this is just a first read of a summary) was the kickback/graft of a few million and the higher-than-market rate that offsett that few million.

Looks like what happened here is that JPM does take about the full $700 million dollar hit to their bottom line... and the SEC doesn't get much in the way of penalties. The beneficiary looks to be the county (which was a party to some of the fraud since someone accepted this kickback in order to send the deal to JPM).

On edit... never mind. You're right. This wasn't the fee for the swaps... it was a cancelation fee for canceling a deal that wasn't made legally. Can't see how they would have won that one.

[lonestarnot]

7. I knew there must be something they wanted us to pay for that we didn't cause.

:D

[Bozita]

8. J.P. Morgan Forfeits Millions in Settling Alabama Bribery Case

Source: NYTimes

November 5, 2009
J.P. Morgan Forfeits Millions in Settling Alabama Bribery Case

By MARY WILLIAMS WALSH


J. P. Morgan Securities will forfeit hundreds of millions of dollars in fees on derivatives contracts that it sold an Alabama county, under a settlement announced Wednesday that could offer hope to other governments staggering under similar deals.

The Securities and Exchange Commission charged in a lawsuit on Wednesday that J. P. Morgan had made unlawful payments to friends of Jefferson County’s commissioners in a scheme to win lucrative business from the county to sell bonds and trade in derivatives.

The lawsuit also named two former J. P. Morgan employees. One of those men has already served a short prison term for manipulating similar bond deals in Philadelphia.

To settle the lawsuit, J. P. Morgan will drop its claims for $647 million in termination fees it had been trying to make Jefferson County pay on the derivatives. The settlement also calls for J. P. Morgan to pay a $25 million penalty to the commission and $50 million to the county.

Read more: http://www.nytimes.com/2009/11/05/business/05derivatives.html?hp

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Banksters with big redasses.

[Angry Dragon]

9. So now when do they come back and ask

the government to bail them out because they do not have enough money to pay their bonuses??

[Dr.Phool]

10. They don't need the government anymore.

They'll just jack up all of our credit card rates to 30%.

[quakerboy]

11. So how does the settlement compare to the damage done?

Is this actually equitable or are they still walking away with a profit?