JPMorgan Chase and Seven Wall Street Companies Settle $68 Million Case on Alleged Price-Fixing Violations

Eight major players in the legacy financial industry have reached an agreement to settle a long-standing price-fixing scandal, culminating in a $68 million settlement after nearly a decade of legal battles.

The banks involved in the case include Bank of America, Barclays Capital Inc., BMO Financial Corp., William Blair & Co. LLC, Citigroup Inc., Fifth Third Bancorp, JPMorgan Chase & Co., and Morgan Stanley. They were all alleged to have engaged in illicit collusion to manipulate the interest rates of specific municipal bonds, a scheme designed to discourage investors from redeeming them for cash.

Originally slated for a court appearance on August 7, the defendants successfully obtained an emergency order, granting them the opportunity to sidestep the trial and opt for a settlement, which was approved by Judge Thomas Donnelly.

During a recent hearing, representatives of Edelweiss Fund, which initiated a whistleblower lawsuit against the banks in 2014, contended that the settlement amount should be doubled. However, Judge Donnelly remained unconvinced and invited them to present their case for an increased settlement size during a briefing on September 15.

As of now, none of the banks involved have publicly addressed media inquiries concerning the settlement.

According to Bloomberg, the approved settlement is roughly one-fifth of the plaintiffs’ original damages claim, which amounted to $349 million. Elliot Stein, an analyst at Bloomberg Intelligence, notes that this outcome favors the defendant banks, especially when divided among the eight entities. It also suggests that other False Claims Act cases in California, New York, and New Jersey may be manageable for the banks if they face similar challenges in their remaining defenses.

This settlement marks another addition to the string of penalties, settlements, and controversies faced by traditional financial institutions in recent times.

In particular, JPMorgan has incurred substantial fines and penalties, totaling close to $39 billion, as a result of regulatory actions, enforcement agency actions, and lawsuits related to anti-competitive practices, securities abuses, and other violations.

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