J.P. Morgan Securities LLC made at least 93 secret deals with companies that handled the bidding processes in 31 states, the Justice Department and Securities and Exchange Commission said Thursday. Those deals allowed the bank to peek at competitors' offers.
Banks help municipalities invest the money they raise from bond offerings so that they can earn interest before paying for projects. They compete by submitting to state and local governments the best yield they can offer.
The alleged bid-rigging deprived governments of a true competitive process that would produce the best returns on their investments, Assistant Attorney General Christine Varney said in a statement.
JPMorgan's settlement covers complaints brought by the SEC, the Internal Revenue Service, bank regulators and 25 state attorneys general. Nearly a quarter of the money will go toward settling civil fraud charges brought by the SEC. A large portion will be divided among states, in part to pay restitution to victims of the fraud.