Connecticut will share in a $92 million settlement from one of the nation’s biggest banks over allegations that JP Morgan Chase & Co. defrauded several state towns and agencies into investing in municipal bond derivatives.
Connecticut led the multistate investigation with Illinois, New York and Texas, for the working group of 24 states and the District of Columbia.
Susan Kinsman, spokesman for Attorney General George Jepsen, said Connecticut’s actual share is to be determined using a formula and allocation plan that will be developed with the states’ experts. The process is anticipated to take several months, Kinsman said.
As part of the settlement, the company has agreed to pay $65.5 million in restitution to affected state agencies, municipalities, school districts and nonprofits nationwide that entered into municipal derivative contracts with JPMC between 2001 and 2005.
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In addition, JPMorgan agreed to pay a $3.5 million civil penalty and $6 million in fees and investigation expenses to the settling states.
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The state settlement also provides that JPMC will pay $17 million in restitution to other government and nonprofits through separate agreements reached today with the U.S. Securities and Exchange Commission and the Office of the Comptroller of the Currency.
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The Connecticut Housing Finance Authority, Fairfield University, the towns of Fairfield, Stratford and Weston, Yale University and the South Central Connecticut Regional Water Authority are among those issuers expected to receive restitution through the settlements.
