Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > Asset Managers

JPMorgan Clearing Deal Will Return $800 Million to Lehman Estate

By Daniel Wagner

X
Your article was successfully shared with the contacts you provided.

WASHINGTON (AP) — JPMorganChase & Co. will return assets worth $800million to lawyers representing the brokerage arm of failed investment bank Lehman Brothers Holdings Inc.

The cash and securities will be distributed to customers who held accounts with the brokerage, Lehman Brothers Inc., the lawyers said Thursday.

JPMorgan controlled the assets because it was the broker-dealer's clearing bank. A clearing bank acts as an intermediary, processing transactions in the securities markets on behalf of a brokerage.

JPMorgancooperated with the court-appointed lawyers seeking to recover assets for Lehman's customers. It held onto the assets until a formal deal could be struck.

A spokesman for JPMorgan said the settlement will not affect the bank financially.

Lehman's bankruptcy filing in September 2008 helped spark a credit crisis that plunged the nation into its deepest recession since the Great Depression.

The trustees for Lehman's brokerage are operating under the Securities Investor Protection Act, which was designed to protect customers of broker-dealers that fail.

Under that law, court-appointed lawyers seek to recover assets for a failed company's estate by bringing actions against those who are believed to owe the company money. The lawyers then seek to divide the assets fairly between customers of the failed company.

The trustee for Lehman Brothers Inc. called the JPMorgan settlement a "milestone" in his efforts.

"The agreement will increase funds held by the LBI Estate available for distribution to public customers of LBI by more than $800million in cash and securities and is a direct result of cooperation and professionalism by both parties in working through complex and difficult issues," SIPA trustee James Giddens said in a statement.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.