JPMorgan faces $2.2 billion fraud (and racketeering) lawsuit over bonds

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-03T170914Z_01_N03202269_RTRIDST_0_FINANCIAL-JPMORGAN-LAWSUIT.XML

NEW YORK, Feb 3 (Reuters) - JPMorgan Chase & Co. (JPM.N: Quote, Profile, Research) faces a civil racketeering lawsuit accusing the No. 3 U.S. bank of defrauding bond investors and others out of at least $2.2 billion over more than 20 years.

The lawsuit, filed on Tuesday with the U.S. District Court in Brooklyn, seeks class-action status.

It accuses New York-based JPMorgan and its predecessors of deleting records for $46.8 billion of bonds that investors had not cashed in, covering up its errors, refusing to pay back bondholders, and collecting fees it did not deserve.

In 2001, JPMorgan agreed to pay a $1 million civil fine to settle U.S. Securities and Exchange Commission charges that it maintained inaccurate records and filed false reports while acting as a bond transfer agent.

"Chase has engaged in shady and illegal accounting practices concerning its handling of the bonds and its collection of service fees from ... bond issuers," the plaintiffs' lawyer, Norman Kaplan of Great Neck, New York, wrote in his 67-page complaint.

...more...

And they call these places the "bastions" of our marketplace.

:banghead:

:grr:

[brentspeak]

1. What will likely happen...

JP Morgan will pay out a settlement of a few million, thereby netting a huge profit, and then go on their merry way. Just like Morgan Stanley and Merrill Lynch. Steal billions, pay millions.