WASHINGTON - JPMorgan Chase & Co. has agreed to pay $211 million after admitting one of its divisions rigged dozens of bidding competitions to win business from state and local governments.
J.P. Morgan Securities LLC made at least 93 secret deals with companies that handled the bidding processes in 31 states, the Justice Department and the Securities and Exchange Commission said Thursday. Those deals allowed the bank to peek at competitors' offers.
Banks help municipalities invest the money they raise from bond offerings so that they can earn interest before paying for projects. They compete by submitting to state and local governments the best yield they can offer.
The alleged bid-rigging deprived governments of a true competitive process that would produce the best returns on their investments, Assistant Attorney General Christine Varney said in a statement.
JPMorgan's settlement covers complaints brought by the SEC, the Internal Revenue Service, bank regulators and 25 state attorneys general. Nearly a quarter of the money will go toward settling civil fraud charges brought by the SEC. A large portion will be divided among states, in part to pay restitution to victims of the fraud.
JPMorgan agreed to cooperate with the investigation in exchange for not being prosecuted, the agency said.
The company admitted and accepted responsibility for the illegal conduct but blamed it on former employees of a division that has been shut down.
It said it "is pleased to have resolved this matter with its regulators," adding that the settlement will not affect its performance.
by Associated Press July 8, 2011
JPMorgan pays $211M to settle bid-rigging charges
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