The SEC just announced that JPMorgan will pay over $150 million to settle charges that it misled investors in "CDO Squared."
The charges were that JPMorgan let Magnetar, a hedge fund, select the assets in CDO Squared, and then sold those assets to investors.
The problem was that JPMorgan didn't disclose to investors that Magnetar had selected the assets in CDO Squared, and then bet that those assets would fail.
The SEC said J.P. Morgan Securities will pay $153.6 million to settle charges that the firm misled investors in a a mortgage-backed securities transaction "just as the housing market was starting to plummet." Read Post
Back in March, we heard that the hedge fund Magnetar packaged CDOs with the riskiest assets they could find, apparently because JPMorgan allowed them to. Now the SEC is investigating whether or not JPMorgan did anything wrong by all... Read Post