Will we see our share?

Was Bolingbrook affected?  If so, when will they pursue?

MADIGAN ANNOUNCES $92 MILLION SETTLEMENT WITH JPMORGAN CHASE OVER BID-RIGGING SCHEME

Bank to Pay Millions to Illinois Municipalities, Schools and Nonprofits for Illegal Practices

Chicago — Attorney General Lisa Madigan today announced a $92 million multistate settlement with JPMorgan Chase & Co. over a scheme to rig bids and engage in anticompetitive practices that defrauded local municipalities, schools, hospitals and prominent nonprofits that purchased municipal bond derivatives from the bank.

“JPMorgan Chase concocted a scheme to enrich themselves by cheating hospitals and schools out of much needed resources,” said Attorney General Madigan. “Today’s settlement will restore funding to agencies throughout Illinois for use as they originally intended – to improve services in their communities.”

Madigan joined 23 states and the District of Columbia in the settlement, which will result in more than $2.2 million in restitution for Illinois municipalities, school districts, hospitals and nonprofits harmed by the bank’s efforts to orchestrate illegal bids for municipal derivatives. JPMC is the third financial institution to settle with the multistate working group in the ongoing municipal bond derivatives investigation. Bank of America and UBS previously settled with the states for $67 million and $90.8 million, respectively.

Today’s agreement centered on allegations that from 2001 to 2005, JPMC conspired with financial institutions and brokers to rig bid prices for municipal derivatives, circumventing the competitive bidding process. In some instances, JPMC and other financial institutions communicated directly with each other, and not through brokers, to fix prices or to fix rates or key terms of these transactions. Brokers also frequently offered JPMC and other financial entities the unfair advantage of reviewing other bids, thus rigging who would win the deal.

Municipalities, schools and other organizations typically issue municipal bonds to fund capital projects. Once bonds are issued, the money is typically placed into accounts to spend as the local entity incurs expenses for the project. Because the money from the bonds does not need to be spent immediately, the entity that issued the bonds typically seeks to invest the money and may also use strategies to manage or transfer the bond’s interest rate risk. These investment accounts and risk management products – which are collectively called “municipal bond derivatives” – are offered by large financial institutions.