Bloomberg News

JPMorgan’s $153.6 Million SEC Settlement Approved by Judge

June 29, 2011

(Updates with settlement details in second paragraph.)

June 29 (Bloomberg) -- A New York federal judge approved a $153.6 million settlement by JPMorgan Chase & Co. of allegations by the Securities and Exchange Commission that the bank misled investors in a mortgage securities transaction just as the housing market was starting to plummet, according to court records.

JPMorgan doesn’t admit or deny allegations in the complaint, and will pay a civil penalty of $133 million, plus $18.6 million disgorgement and $2 million in interest, according to papers signed by Judge Richard M. Berman in Manhattan court today. Of the payments, $126 million will be for investors who bought notes in a product called Squared CDO 2007-1.

The order also states that JPMorgan and its employees are barred from making money by “means of any untrue statement of a material fact or any omission of a material fact” or engaging in any transaction which “would operate as a fraud or deceit upon the purchaser.”

JPMorgan shares rose as much as 93 cents, or 2.35 percent, to $40.47 and were trading on the New York Stock Exchange at $40.11, up 57 cents, as of 10:42 a.m.

The case s In re U.S. Securities and Exchange Commission v. JPMorgan Securities LLC; 11-cv-04206; Southern District of New York (Foley Square).

--Editors: David Rovella, John Pickering

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net Tiffany Kary in New York at tkary@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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