June 5 (Reuters) - JPMorgan Chase & Co received court
permission to pay as much as $44.6 million to resolve private
litigation accusing the largest U.S. bank of conspiring to fix
prices and rig bids on municipal bond transactions.
U.S. District Judge Victor Marrero in Manhattan granted
preliminary approval of the accord on Monday night, calling it
fair, reasonable and adequate.
Marrero also conditionally certified a class of plaintiffs
involved in transactions from 1992 through August 2011. He
scheduled a hearing to consider final approval for Dec. 14.
JPMorgan spokeswoman Jennifer Zuccarelli declined to
The settlement follows JPMorgan's agreement last July to pay
$211.2 million to settle charges by federal and state
authorities that it had cheated government entities in 31 U.S.
states on 93 transactions.
That accord was part of long-running criminal and civil
investigations into whether banks and brokers conspired to
overcharge state and local governments on investments. Bank of
America Corp and UBS AG previously reached respective $137
million and $160.2 million settlements of those probes.
When municipalities sell bonds, they typically invest
proceeds that they do not need to spend immediately in a variety
of investment vehicles. They usually hire brokers to seek out
competitive bids, a process monitored by the Internal Revenue
Service because of the tax-exempt status of municipal bonds.
According to regulators, JPMorgan improperly won some bids
after arranging with bidding agents to get a "last look" at its
competitors' bids. In other cases, JPMorgan purposely submitted
non-winning bids, including bids to satisfy tax regulations,
Under its settlement with the U.S. Justice Department,
JPMorgan admitted responsibility for illegal conduct by former
employees. In settling with the U.S. Securities and Exchange
Commission, the bank did not admit wrongdoing.
Among the plaintiffs in the private litigation are the city
of Baltimore and government entities in Mississippi and Bucks
Morgan Stanley and Wells Fargo & Co have also settled their
portions of that litigation, which named more than two dozen
The case is In re: Municipal Derivatives Antitrust
Litigation, U.S. District Court, Southern District of New York,
For the Plaintiffs: Michael Hausfeld of Hausfeld, William
Carmody of Susman Godfrey, and William Isaacson of Boise,
Schiller, & Flexner.
(Reporting by Jonathan Stempel)
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