In a settlement of its "London Whale" trading scandal, JP Morgan Chase & Co agreed to pay $150 million to resolve the securities fraud lawsuit by investors which had sued the suing the bank over the scandal which caused a $6.2 billion loss.
A class action lawsuit filed in the wake of the scandal that emerged in 2012 would be resolved by the settlement that was disclosed in papers filed on Friday in federal court in Manhattan.
Oversight by JPMorgan's Chief Investment Office of a synthetic credit portfolio that caused the $6.2 billion loss was the source of the lawsuit. The oversight was linked to traders in the bank's London office including Bruno Iksil, the so-called London Whale.
JP Morgan as accused of knowingly hiding increased risks at the Chief Investment Office including on an April 13, 2012, conference call when JPMorgan Chase & Co Chief Executive Officer Jamie Dimon called reports about the synthetic portfolio a "tempest in a teapot, accused shareholders.
More than $40 billion of market value was wiped out during the period from April 13 to May 21, 2012, a time when JPMorgan's share price fell by roughly one-quarter and the settlement covers anyone who bought JPMorgan stocks in that period.
The lawsuit was spearheaded by pension funds in the U.S. states of Arkansas, Ohio and Oregon and in Sweden.
The deal would help the state's Ohio Public Employees Retirement System recover its losses and discourage future fraud, Ohio Attorney General, Mike DeWine in a statement.
"Misleading investors with wrong or incomplete information is unacceptable and causes real damage," DeWine said.
A spokeswoman for JPMorgan did not immediately respond to a request for comment.
Criminal charges in the United States were levied against former traders Javier Martin-Artajo and Julien Grout with hiding losses linked to Iksil, who has been cooperating with prosecutors.
A day earlier the largest US bank by assets will also have to pay more than $US300 million ($422 million) to settle allegations it didn't inform clients properly about numerous conflicts of interest in how it managed customers' money over a half decade.
The bank reaped profit by putting their money into mutual funds and hedge funds that generated fees for the company and did not tell the customers about it, said the SEC while announcing $US267 million in penalties and disgorgement against JPMorgan.
The bank agreed to pay $US40 million more as part of a parallel action by the Commodity Futures Trading Commission.
In recent years, the bank has been penalized more than $US23 billion in settlements by the US authorities in connection with allegations that included conspiring to manipulate foreign currency rates, failing to flag transactions related to Bernard Madoff's Ponzi scheme and misrepresenting the value of mortgage-backed securities.
Disclosure failures were admitted by the bank from 2008 to 2013 related to two units that manage money – its securities subsidiary and its nationally chartered bank. At one point in early 2011, JPMorgan invested 47 per cent of mutual-fund assets in products and accounts that had ties to it, the SEC order said.
(Source:www.cnbc.com)
A class action lawsuit filed in the wake of the scandal that emerged in 2012 would be resolved by the settlement that was disclosed in papers filed on Friday in federal court in Manhattan.
Oversight by JPMorgan's Chief Investment Office of a synthetic credit portfolio that caused the $6.2 billion loss was the source of the lawsuit. The oversight was linked to traders in the bank's London office including Bruno Iksil, the so-called London Whale.
JP Morgan as accused of knowingly hiding increased risks at the Chief Investment Office including on an April 13, 2012, conference call when JPMorgan Chase & Co Chief Executive Officer Jamie Dimon called reports about the synthetic portfolio a "tempest in a teapot, accused shareholders.
More than $40 billion of market value was wiped out during the period from April 13 to May 21, 2012, a time when JPMorgan's share price fell by roughly one-quarter and the settlement covers anyone who bought JPMorgan stocks in that period.
The lawsuit was spearheaded by pension funds in the U.S. states of Arkansas, Ohio and Oregon and in Sweden.
The deal would help the state's Ohio Public Employees Retirement System recover its losses and discourage future fraud, Ohio Attorney General, Mike DeWine in a statement.
"Misleading investors with wrong or incomplete information is unacceptable and causes real damage," DeWine said.
A spokeswoman for JPMorgan did not immediately respond to a request for comment.
Criminal charges in the United States were levied against former traders Javier Martin-Artajo and Julien Grout with hiding losses linked to Iksil, who has been cooperating with prosecutors.
A day earlier the largest US bank by assets will also have to pay more than $US300 million ($422 million) to settle allegations it didn't inform clients properly about numerous conflicts of interest in how it managed customers' money over a half decade.
The bank reaped profit by putting their money into mutual funds and hedge funds that generated fees for the company and did not tell the customers about it, said the SEC while announcing $US267 million in penalties and disgorgement against JPMorgan.
The bank agreed to pay $US40 million more as part of a parallel action by the Commodity Futures Trading Commission.
In recent years, the bank has been penalized more than $US23 billion in settlements by the US authorities in connection with allegations that included conspiring to manipulate foreign currency rates, failing to flag transactions related to Bernard Madoff's Ponzi scheme and misrepresenting the value of mortgage-backed securities.
Disclosure failures were admitted by the bank from 2008 to 2013 related to two units that manage money – its securities subsidiary and its nationally chartered bank. At one point in early 2011, JPMorgan invested 47 per cent of mutual-fund assets in products and accounts that had ties to it, the SEC order said.
(Source:www.cnbc.com)
