JPMorgan pays $228M to settle bid-rigging charges

By The Associated Press
Posted: 4:50 pm Thu, July 7, 2011

WASHINGTON — A unit of JPMorgan Chase & Co. will pay $228 million to settle civil fraud charges that it rigged dozens of bidding competitions to win business from cities and counties.

J.P. Morgan Securities LLC made at least 93 secret deals with companies that handled the bidding processes in 31 states, according to the Justice Department and Securities and Exchange Commission. 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.