JPMorgan in $23 million settlement with clients over Lehman
By Jonathan Stempel
NEW YORK (Reuters) - JPMorgan Chase & Co agreed to pay $23 million to settle a lawsuit accusing it of mishandling money of pension funds and other clients by investing it in notes from Lehman Brothers Holdings Inc, which later went bankrupt.
The largest U.S. bank denied wrongdoing in agreeing to settle, and entered the settlement solely to eliminate the burden and cost of litigation, according to papers filed on Friday with the U.S. District Court in Manhattan.
Lawyers for the plaintiffs called the settlement terms fair, reasonable and adequate, according to Friday's filing. The settlement requires approval by U.S. District Judge Katherine Forrest in Manhattan.
The case over the Lehman notes had been bought on behalf of participants in JPMorgan's securities lending program, led by the Operating Engineers Pension Trust of Pasadena, California, and had sought class action status.
Paul Geller, a partner at Robbins Geller Rudman & Dowd representing the plaintiffs, did not immediately respond to a request for comment. JPMorgan spokesman Brian Marchiony did not immediately respond to a similar request.
The settlement is one of two disclosed on Friday over claims against JPMorgan tied to the recent credit and financial crises.
Liquidators for two Bear Stearns hedge funds that collapsed in 2007 because of problems with subprime mortgages agreed to drop their lawsuit against JPMorgan, which bought Bear in 2008, to recoup at least $1.1 billion of losses.
Terms of that settlement were not disclosed. Continued...