Texas Cities and Nonprofit Entities to Get About $3.5 Million in National Settlement of JPMorgan Suit
Settlement helps, a little.
Financial giant JPMorgan has agreed to pay $228 million to settle charges that it manipulated deals involving the government bond market, and Texas Attorney General Greg Abbott says the state's portion of it will be about $3.5 million.
The money will go to Texas municipalities and nonprofit groups who were affected by JPMorgan's rigging of the market for municipal bond derivatives, which are securities that state and local governments use to reinvest proceeds from the sale of municipal bonds.
You can read the settlement agreement here.
Abbott said Texas led the way in the effort against JPMorgan, which included 23 states and the District of Columbia.
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"During their investigation, the state attorneys general uncovered multiple instances of improper conduct, including bid rigging, receiving and providing 'last looks,' submitting non-competitive courtesy bids, and submitting fraudulent arms-length bidding certifications," his office said.
The statement added:
By improperly employing anticompetitive bid-rigging schemes, the defendant financial institutions and their brokers sought to artificially raise the prices of derivatives and related products at the expense of the bond issuer and taxpayers. As a result, state, local and not-for-profit entities that entered into municipal derivatives contracts were forced to pay artificially inflated interest rates and received lower returns on their investments than they would have earned in a competitive marketplace.