JPMorgan to Pay $20 Million to Settle Lehman Case
The Commodity Futures Trading Commission said on Wednesday that JPMorgan Chase & Co will pay $20 million to settle charges that it unlawfully handled customer segregated funds at Lehman Brothers Holdings Inc.
The CFTC's order also requires JPMorgan to implement reforms to ensure the proper handling of customer segregated funds in the future and to release customer funds upon notice and instruction from the CFTC.
A JPMorgan spokeswoman did not immediately return a request for comment. Lehman spokeswoman Kimberly Macleod declined to comment.
The CFTC said that for about 22 months, ending with Lehman's bankruptcy in September 2008, JPMorgan had improperly extended intra-day credit to Lehman Brothers based in part on customers' segregated funds Lehman had deposited at the bank.
JPMorgan also violated rules by refusing to release customers' segregated funds for nearly two weeks after the bankruptcy, the CFTC said.
The action comes as regulators continue to probe what happened to segregated customer funds in the October 2011 collapse of MF Global Holdings Ltd, a commodity trading firm that also did business with JPMorgan.
JPMorgan had 2011 net income of $19 billion and recorded $4.9 billion in litigation expenses. It paid Chief Executive Officer Jamie Dimon $20.8 million in 2010. (Reporting by Karey Wutkowski in Washington and David Henry in New York.; Editing by Maureen Bavdek and Gerald E. McCormick)
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