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JP Morgan pays $154m to end US fraud case

JP Morgan Chase has agreed to pay $153.6m to resolve US civil fraud charges that it misled investors in a mortgage-related security for an Illinois-based hedge fund that was betting against the deal.

The Securities and Exchange Commission claims JP Morgan failed to tell investors that Magnetar had a role in selecting the mortgages in the pool and bet a large sum of money against it failing, according to the Financial Times.

According to the SEC, JP Morgan had led investors to believe the mortgage portfolio had been selected by GSC Capital, an independent investment adviser.

Yesterday, US credit union regulator the National Credit Union Administration announced it is suing both JP Morgan and Royal Bank of Scotland for more than $800m for allegedly misselling mortgage-backed securities.

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  1. John de Clef Pineiro 22nd June 2011 at 4:15 pm

    Well, folks, it’s official: the U.S. government has now become a fraud bailout service of last resort.

    One might even say that it has gone into the insurance business by offering liability insurance indemnification for “no-fault” securities fraud at a price, for, make no mistake, that’s what resolving for a mere fine criminal activity and avoiding conviction and jail time for wrong-doing really is.

    Fraudsters really have a friend in the White House they can count on for a “helping hand.”

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