By Jamie Smith Hopkins, The Baltimore Sun
4:29 PM EDT, July 7, 2011
Maryland will share in a $75 million settlement that state attorneys general across the country negotiated with JPMorgan Chase & Co. to resolve allegations of bond derivative bid-rigging that defrauded states, counties and nonprofits, the state said Thursday.
The Maryland attorney general's office said it was not yet clear how much would go to each of the 25 states involved in the settlement. But about 10 agencies and nonprofits in Maryland are expected to receive money, including the Johns Hopkins Hospital and the University of Maryland Medical System.
The JPMorgan agreement was part of a $228 million settlement jointly negotiated with federal agencies about the bank's actions in the municipal bond derivatives market, and it came on the heels of settlements with Bank of America and UBS.
Tax-exempt entities sell municipal bonds to pay for construction and other projects. Between the sale and the point that the money needs to be spent, agencies and nonprofits can use bond derivatives to invest the funds and earn a return.
The state attorneys general say JPMorgan, other financial giants and brokers rigged bids from the late 1990s through 2005 to profit at the expense of agencies and nonprofits, which received less money as a result.
"The investigations focused on a small desk that was discontinued and on certain employees who are no longer with the firm," JPMorgan said in a statement Thursday. "These employees concealed their conduct from management."
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