JPMorgan to pay $1.42 billion cash to settle most Lehman claims

ezgif.com-resize (5)JPMorgan Chase & Co (JPM.N) will pay $1.42 billion in cash to resolve most of a lawsuit accusing it of draining Lehman Brothers Holdings Inc of critical liquidity in the final days before that investment bank’s September 2008 collapse.

The settlement was made public on Monday, and requires approval by U.S. Bankruptcy Judge Shelley Chapman in Manhattan.

It resolves the bulk of an $8.6 billion lawsuit accusing JPMorgan of exploiting its leverage as Lehman’s main “clearing” bank to siphon billions of dollars of collateral just before Lehman went bankrupt on Sept. 15, 2008, triggering a global financial crisis.

Lehman’s creditors charged that JPMorgan did not need the collateral and extracted a windfall at their expense.

Source:: Reuters

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