Even after a $700 million settlement with the federal government, JPMorgan Chase still faces troubles in Alabama.
On Friday, Jefferson County sued the bank, seeking additional relief on $3.2 billion in county sewer bonds the bank helped underwrite. Under the previous settlement, the county will receive $50 million and will not have to pay the bank $650 million in fees. But the county says it needs more help to get out from under the huge debt that remains.
The county, which includes Birmingham, accused JPMorgan of fraud and conspiracy in selling it several packages of debt and derivatives known as interest rate swaps that “provided no value to the county or its citizens, and created an inherently flawed financial structure that imploded within just a few years.”
The bank issued a statement in response to the lawsuit, saying: “We believe the claims are meritless and we intend to defend ourselves vigorously. Meanwhile, we continue to work to achieve a responsible restructuring of Jefferson County’s financial affairs.”
Under the settlement with the Securities and Exchange Commission, announced earlier this month, the bank did not admit any wrongdoing.
for full article see link: http://www.nytimes.com/2009/11/14/business/14muni.html?_r=1&ref=business
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