JPMorgan Chase will pay nearly another $800 million to settle a lawsuit with Lehman Brothers, according to a HousingWire report. The suit claims that JPMorgan illegally siphoned billions of dollars from Lehman Brothers before the investment bank failed.
With this final settlement agreement, JPMorgan will have paid well over $2 billion to settle the case, according to HousingWire.
Last year, JPMorgan settled a “significant portion” of Lehman Brothers’ claims with a payment of $1.42 billion. Lehman originally demanded $8.6 billion to settle all claims.
But it seems JPMorgan was able to dodge that bullet. The bank disclosed in an SEC filing today that it would pay Lehman Brothers an additional $797.5 million to settle all remaining “lawsuits, claims, objections and other disputes.” The settlement will end the failed bank’s claims against JPMorgan.
The lawsuit accused JPMorgan of exploiting its position as Lehman Brothers’ main “clearing” bank to take billions of dollars of collateral just before Lehman failed in 2008, triggering the global financial meltdown. Lehman Brothers’ creditors said JPMorgan didn’t need the collateral, HousingWire reported. Instead, they claim, the bank siphoned off a hefty profit at their expense.
The settlement still needs to be approved by the bankruptcy court, according to JPMorgan’s SEC filing.