JPMorgan Chase, Bank of America and Six Financial Giants Pay $70, 000, 000 Settlement Over Allegations of 'Widespread Fraud and Collusion' - The Daily Hodl

[Gunnar Larson]

https://dailyhodl.com/2024/03/23/jpmorgan-chase-bank-of-america-and-six-financial-giants-pay-70000000-settlement-over-allegations-of-widespread-fraud-and-collusion/


Eight financial giants are shelling out tens of millions of dollars to
settle a decade-long whistleblower lawsuit.

JPMorgan Chase, Bank of America, Citigroup, Morgan Stanley, Fifth Third
Bancorp, Barclays, Bank of Montreal (BMO) and William Blair were sued in
2014, accused of reaping millions in illicit profits by rigging interest
rates on municipal bonds.

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The whistleblower, identified in the lawsuit as Edelweiss Fund LLC, says
the firms have paid $70 million to settle the lawsuit.

Edelweiss accused the group of Wall Street firms of “widespread fraud and
collusion” after the state of Illinois hired them to market municipal bonds
known as variable rate demand obligations (VRDOs) at the lowest possible
interest rates.

VRDOs are tax-exempt bonds issued by municipalities to get long-term
financing, usually spanning 20 to 30 years.

But instead of marketing the bonds at low interest rates, the banks
allegedly inflated the rates to generate millions of dollars in fees and
discourage investors from converting the debt securities to cash.
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