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 (f/k/a J.P. Morgan Securities Inc.)
First Document Date 21-Jun-2011
Initial Filing Format Civil Proceeding
Case Number 11-cv-04206
Allegation Type Securities Offering
Federal District Court New York, Southern District of New York

Violations Alleged

Securities Act
Sec 17(a)(2)
Sec 17(a)(3)


First Resolution Date 21-Jun-2011
Headline Total Penalty and Disgorgement

See Related Documents

Related Documents:

LR-22008 21-Jun-2011 Litigation Release
J.P. Morgan Securities to Pay $153.6 Million to Settle SEC Charges of Misleading Investors in CDO Tied to U.S. Housing Market. Harmed Investors Getting their Money Back, Firm to Pay Penalty and Change Practices.
On June 21, 2011, the SEC published a litigation release regarding this matter. According to the release: "J.P. Morgan Securities to Pay $153.6 Million to Settle SEC Charges of Misleading Investors in CDO Tied to U.S. Housing Market."
complaint_11-cv-04206 21-Jun-2011 Complaint
The Complaint stated that: "The Commission brings this securities fraud action relating to the structuring and marketing of a largely synthetic collateralized debt obligation ('CDO') called Squared CDO 2007-1 ('Squared'). The investment portfolio for Squared consisted primarily of credit default swaps ('CDS') referencing other CDO securities who value was tied to the United States residential housing market. J.P. Morgan Securities structured and marketed this $1.1 billion 'CDO squared' in early 2007 when the housing market and the securities referencing it were beginning to show signs of distress. Synthetic CDO squares were designed to, and did, result in leveraged exposure to the housing market and therefore magnified losses when the United States housing market experiences a downturn. J.P. Morgan Securities' marketing materials for Squared -- including the pitch book, term sheet, and offering circular -- all represented that the investment portfolio of Squared was selected by GSCP (NJ) L.P. ('GSC'), a registered investment adviser with experience analyzing credit risk in CDOs. Undisclosed in the marketing materials and unbeknownst to investors, a large hedge fund, Magnetar Capital LLC ('Magnetar'), with economic interests adverse to investors in Squared, play a significant role in the portfolio selection process with the knowledge of J.P. Morgan Securities."
2011-131 21-Jun-2011 Press Release--Civil Action
J.P. Morgan to Pay $153.6 Million to Settle SEC Charges of Misleading Investors in CDO Tied to U.S. Housing Market; Harmed Investors Getting Their Money Back, Firm to Pay Penalty and Change Practices
On June 21, 2011, the SEC announced that, "J.P. Morgan Securities LLC will pay $153.6 million to settle SEC charges that it mislead investors in a complex mortgage securities transaction just as the housing market was starting to plummet. Under the settlement, harmed investors will receive all of their money back."
court_doc4_11-cv-04206 29-Jun-2011 Court Docket Document
Final Judgment as to Defendant J.P. Morgan Securities LLC
On June 29, 2011, Federal District Judge Richard M. Berman entered Final Judgment against J.P. Morgan Securities LLC, pursuant to the SEC and J.P. Morgan Securities LLC's consent. The Court also ordered that: "based on Defendant's agreement to cooperate in this action and any related actions, the Court is not ordering Defendant to pay a civil penalty in excess of $133,000,000."

Related Actions:

SEC v. Edward S. Steffelin
In the Matter of GSCP (NJ), L.P.