J.P. Morgan Paying $2.1M in Settlement

R.A. Hettinga rah at shipwright.com
Tue Feb 15 04:42:11 PST 2005



Associated Press
Update 1: J.P. Morgan Paying $2.1M in Settlement
 02.14.2005, 06:02 PM

The securities arm of J.P. Morgan Chase & Co. has agreed to pay $2.1
million to settle regulators' charges that it failed to preserve e-mails
sought by the authorities in their 2002-2003 investigation of alleged
conflicts of interest at Wall Street investment houses.

J.P. Morgan Securities Inc. is paying $700,000 in civil fines in each of
three separate settlements with the Securities and Exchange Commission, the
New York Stock Exchange and the National Association of Securities Dealers,
which is the brokerage industry's self-policing organization. The
investment firm neither admitted nor denied the allegations of violating
record-keeping rules.

J.P. Morgan spokesmen declined comment.

J.P. Morgan was among ten of Wall Street's biggest firms that paid a total
$1.4 billion and adopted reforms as a result of the investigation, in which
regulators found that they issued biased ratings on stocks to lure
investment-banking business. J.P. Morgan's share of the industrywide
settlement, reached in April 2003, was $80 million.

In the course of the investigation, begun in April 2002, J.P. Morgan told
the regulators that all the relevant e-mails had been provided, the SEC
said. In fact, the agency, said, the firm's systems and procedures for
retaining e-mails "were inadequate to ensure that all electronic
communications relating to (its) business were preserved for three years
and for the first two years in an easily accessible place" as required by
the rules.

Companies' retention of internal documents took on new importance after the
Enron scandal, in which key papers were shredded, and the landmark
anti-fraud law enacted in July 2002 created new penalties for document

R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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