J.P. Morgan settles bid rigging case

July 7, 2011 at 5:50 PM
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WASHINGTON, July 7 (UPI) -- Finance giant J.P. Morgan Securities has agreed to pay $228 million to settle charges of rigged investment bidding, U.S. regulators said.

The company did not admit to any wrongdoing, but parent company JPMorgan Chase said in a statement, "The investigations focused on a small desk that was discontinued and on certain employees who are no longer with the firm," The Washington Post reported Thursday.

"These employees concealed their conduct from management," the statement said.

The Securities and Exchange Commission had charged the company with rigging bids for municipal investments with funds originating with bond issuance.

The shady deals began in 1997 and continued for eight years. The bid rigging incidents involved 93 bond deals in 31 states.

The deal reached Thursday includes settling the cases with the Justice Department, the IRS, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York, the Post said.

SEC Enforcement Director Robert Khuzami said, "Municipal issuers and investors didn't stand a chance against the fraudulent strategies JPMS and others used to guarantee profits."

In a related case, former J.P. Morgan Vice President James Hertz pleaded guilty to conspiracy and fraud charges in December.

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