J.P. Morgan Securities LLC will pay $153.6 million to settle Securities and Exchange Commission allegations that it misled investors in a complex mortgage securities transaction just as the housing market was starting to plummet.
Under the settlement, harmed investors will receive all of their money back and the Wall Street firm also has agreed to improve its mortgage securities reviews and approvals, according to the SEC.
The SEC had alleged J.P. Morgan had structured and marketed a synthetic collateralized debt obligation without informing investors a hedge fund helped select the assets in a mortgage-related CDO portfolio and had a short position in more than half of those assets.
The SEC said in answer to a question during a press conference about the settlement that similar cases would remain a priority for the commission.
In the settlement, J.P. Morgan neither admitted nor denied the allegations.
The SEC said it also has filed separate charges against an individual identified as having headed the team that implemented the process for purportedly selecting the investment portfolio.
