WASHINGTON (AP) — JPMorgan Chase has agreed to pay a $20 million fine to settle federal regulators' civil charges of illegally handling funds that failed Lehman Brothers had deposited with the bank.
The Commodity Futures Trading Commission announced the settlement Wednesday. It involved JPMorgan's handling of customer funds from November 2006 to September 2008 when Lehman collapsed. Lehman's futures brokerage firm, LBI, deposited its customer funds with JPMorgan. The handling of customer funds at futures brokerages has drawn more attention since the failure last fall of MF Global. About $1.6 billion in MF Global customer funds are missing.
The CFTC says JPMorgan extended too much credit to LBI on a daily basis for its own trades because the bank included customer funds in calculating LBI's equity.