Defendant Name:
J.P. Morgan Securities LLC
Defendant Type:
Subsidiary of Public Company
Public Company Parent:
JPMorgan Chase & Co.
SIC Code:
6712
CUSIP:
46625H10
Initial Case Details
Legal Case Name
SEC v. J.P. Morgan Securities LLC
First Document Date
07-Jul-2011
Initial Filing Format
Civil Proceeding
Case Number
11-cv-03877
Allegation Type
Municipal Securities & Public Pensions
Federal District Court
New Jersey, District of New Jersey
Resolutions
First Resolution Date
07-Jul-2011
Headline Total Penalty and Disgorgement
See Related Documents
Related Documents:
Complaint
On July 7, 2011, the SEC filed a complaint in the New Jersey District Court against J.P. Morgan Securities. The complaint alleges that the company undertook "various fraudulent bidding practices...involving the temporary investment of proceeds from the sale of tax-exempt municipal securities in certain reinvestment instruments by state and local governments in the United States." The SEC alleges that "[d]uring an eight-year period, JPMS rigged at least 93 transactions concerning the reinvestment of proceeds from the sale of over $14.3 billion of underlying municipal securities, generating millions of dollars in ill-gotten gains." The Commission asks for relief in the form of enjoinment and disgorgement of profits.
SEC Charges JPMS with Fraudulent Bidding Practices Involving Investment of Municipal Bond Proceeds: J.P. Morgan to Pay $228 Million to Settle Charges by SEC, Others
On July 7, 2011, the SEC published a litigation release on this matter. According to the release, the Commission charged J.P. Morgan Securities LLC with "rigging at least 93 municipal bond reinvestment transactions in 31 states, generating millions of dollars in ill-gotten gains." The Commission alleged that from 1997 through 2005, J.P. Morgan Securities' fraudulent practices "undermined the competitive bidding process, affected the prices that municipalities paid for reinvestment products, and deprived certain municipalities of a conclusive presumption that the reinvestment instrument had been purchased at fair market value." Finally, the Commission alleged that the company's conduct "jeopardized the tax-exempt status of billions of dollars in municipal securities because the supposed competitive bidding process that established the fair market value of the investment was corrupted." Subject to court approval, J.P. Morgan Securities consented to an entry of final judgment enjoining it from future violations of Section 15(c)(1)(A) of the Exchange Act and agreed to pay a civil penalty of $32.5 million and disgorgement of $11,065,969 with prejudgment interest of $7,620,380. Additionally, J.P. Morgan Securities and its affiliates "agreed to pay $177 million to settle parallel charges brought by other federal and state authorities." The company neither admits nor denies any of the allegations.
2011-143
07-Jul-2011
Press Release--Civil Action
SEC Charges J.P. Morgan Securities With Fraudulent Bidding Practices Involving Investment of Municipal Bond Proceeds; J.P. Morgan to Pay $228 Million to Settle Charges by SEC, Others
On July 7, 2011, the SEC announced that it, "charged J.P. Morgan Securities LLC (JPMS) with fraudulently rigging at least 93 municipal bond reinvestment transactions in 31 states, generating millions of dollars in ill-gotten gains."
Final Judgment as to Defendant J.P. Morgan Securities LLC
On July 8, 2011, a Final Judgment as to defendant J.P. Morgan Securities LLC was issued. Without admitting or denying allegations of a previously filed complaint against the company, J.P. Morgan Securities consented to the Final Judgment. J.P. Morgan Securities consented to be liable for disgorgement of $11,065,969, prejudgment interest of $7,620,380, and a civil penalty of $32,500,000 pursuant to Section 21(d) of the Exchange Act. J.P. Morgan Securities agreed to set up a Fair Fund to pay an aggregate amount of $51,186,349 pursuant to Section 308(a) of the Sarbanes-Oxley Act. Finally, J.P. Morgan Securities and its agents were enjoined from violating Section 15(c)(1)(A) of the Exchange Act.
Order
The Court ordered that: "The attached "Corrected Attachment A" list of payees shall replace the "Attachment A" originally filed with the July 8, 2011 Final Judgement as to Defendant J.P. Morgan Securities LLC."