The Real Deal Miami

JPMorgan Chase pays $154M fine in settlement with SEC

June 21, 2011 04:22PM

JPMorgan Chase finalized a $154 million settlement with the Securities and Exchange Commission, following a lawsuit alleging it misled investors in a mortgage-backed securities transaction, Crain’s reported. The bank failed to disclose to investors that a hedge fund client, Illinois-based Magnetar Capital, was selecting the assets being traded and bet against them. Eventually, many of those mortgages defaulted, causing customers big losses. Investors in the fund included Thrivent Financial for Lutherans, a non-profit life insurer, and assets from General Motors pension plan. JPMorgan itself lost $900 million, and wasn’t charged with intentional or reckless conduct. The bank said it was “pleased to have reached an agreement.” Crain’s said the settlement was similar to the $550 million one paid by Goldman Sachs, when it didn’t disclose that John Paulson was selecting the assets in its Abacus portfolio. [Crain’s]