Daily Archives: January 4, 2014

Link

JPMorgan Settles Pittsburgh Bank Suit Probing U.S. Deal

JPMorgan Settles Pittsburgh Bank Suit Probing U.S. Deal

JPMorgan Chase & Co. (JPM) agreed to settle a Pittsburgh lender’s lawsuit after a judge ordered the New York-based bank to turn over the government’s draft complaint at the center of its $13 billion deal with regulators.

Lawyers for the Federal Home Loan Bank of Pittsburgh said yesterday in Pennsylvania state court that they had reached an agreement, without disclosing terms of the deal. The Pittsburgh FHLB sued JPMorgan and credit-ratings companies in 2009 over losses on $1.8 billion in mortgage-backed securities it bought in 2006 and 2007.

The deal came less than a month after a judge ordered JPMorgan, the biggest U.S. lender by assets, to give the plaintiff’s lawyers a draft of the U.S. Justice Department’s proposed complaint that the record settlement was based on. That deal resolved allegations involving sales of mortgage bonds that officials said helped fuel the financial crisis of 2008.

The Pittsburgh FHLB argued that the conduct and transactions at issue in its case were the same as those addressed in the settlement with the government. The draft complaint, the bank said in court papers, would provide a more detailed account of the federal probe and reveal the name of a JPMorgan employee who cooperated with the federal investigation.

 

Link

Canada Competition Watchdog Drops Libor Probe

Canada Competition Watchdog Drops Libor Probe

TORONTO–Canada’s competition watchdog said Friday it had abandoned its investigation into the alleged collusion of certain interbank interest rates for lack of evidence to justify prosecution.

Canada’s Competition Bureau launched its investigation in 2011 as part a bigger probe by antitrust authorities in Europe and the U.S. into the setting of the London interbank offered rate, or Libor, and other trading rates. The Competition Bureau’s investigation centered on whether foreign affiliates of five major banks were colluding in the setting of yen Libor rates and their use in pricing interest rate derivative products.

Libor, the most widely used short-term interest benchmark, is the rate banks charge each other to borrow funds. More than $800 trillion in securities and loans are linked to Libor.

In a release, the Competition Bureau, said it conducted an “exhaustive review” of the evidence it obtained, but in the end it proved “insufficient to justify prosecution.”

Link

Detroit manager: We asked SEC to investigate banks

Detroit manager: We asked SEC to investigate banks

Detroit‘s state-appointed emergency manager said Friday that an agreement to pay off banks and settle millions of dollars in debt tied to an interest rate swap deal resolves a “sordid tale” and fuels a massive recovery plan for the broke city.

Kevyn Orr testified in federal court that the proposal to terminate the deal for $165 million is best for Detroit, adding that it removes significant financial and legal risks and allows the nation’s largest public bankruptcy restructuring to proceed.

He says the deal put the city in such a bind that he and other city officials considered suing the banks involved and even approached the Securities and Exchange Commission to investigate.