No name of the agencies of the State split $1. 3 M JPMorgan settlement The Star-Ledger - NJ.com

AP JPMorgan Chase has signed a global agreement of 228 million on the allegations of fraud. A yet to be determined number of New Jersey municipal bond issuers split 1.3 million in restitution.

Municipal issuers bond in New Jersey will receive $ 1.3 million in restitution as part of a multi-State settlement that JPMorgan Chase signed yesterday to resolve a scheme alleged municipal bond 92 million.

The names of organizations and municipalities affected by the alleged fraud was not available, said Leland Moore, a spokesman for the Office of the Attorney General in New Jersey.

"It is an important regulation, not only for government agencies and non profit affected by fraudulent behavior alleged here, but for all residents of New Jersey," said Paula Dow, Attorney General of the State. "The conduct involved case made against bond issuers - and finally in New Jersey taxpayers - and worked against a fair, transparent and competitive market."

The settlement of $ 92 million breaks down as follows: $ 65.5 million will be used as the return to the State, non-profit organizations, municipalities and school districts who have concluded contracts with the company between 2001 and 2005. the company will pay a civil penalty of $ 3.5 million and $ 6 million will go to cover the costs of the investigation of 25 States of settling.

Another $ 17 million will be paid to other Governments and non-profit organizations under a separate agreement with the U.S. Securities and Exchange Commission and the Office of the Comptroller of the currency.

The multi-state agreement is part of a comprehensive settlement of 228 million that JP Morgan Chase signed yesterday. It includes agreements with Antitrust Division of the U.S. Department of Justice, the Internal Revenue Service and the Federal Reserve Board.

In 2008, State authorities began to investigate allegations that large financial institutions, brokers and consultants defrauded swap agencies on the market of derivatives municipal bonds.

When banks buy municipal securities, Governments are usually reinvest the proceeds of the sale until the money is used for the intended purpose. The IRS regulations say that the product should be invested in the fair market value, which is usually determined by a competitive tender process.

A statement of the SEC has provided the following description of the allegations against JPMorgan:

JPMorgan would have used "fraud, false statements and omissions" to undermine the process of tendering and affected the price as reinvested municipalities, leaving a few State, city, municipality and the organizations non profit uncertain whether if they were paid a fair price.

Some of these entities have said that they have been deceived on their investments because that JPMorgan allegedly rigged the bidding process.

Now, organizations that said they lose money on contracts with the Bank will have to wait several weeks to determine if they are entitled to a part of the colony of $ 1.3 million.

The Attorney General must submit a list of what they think are eligible State, municipal and non-profit JPMorgan entities and, according to the agreement, the Bank will have the opportunity to make objections, but the State will determine the final list.

"When powerful financial institutions such as (JP Morgan) conspire with them for intentionally violating regulations to ensure the price fair investment, the integrity of the municipal market is damaged," said Elaine Greenberg, head of municipal securities of SEC. "Instead of playing by the rules, the rules it is played."

Stacy Jones: (973) 392-7969, stacy_jones@starledger.com or @ stacyannj on Twitter

Survey of State funds happened very quiet (latimes)

Almost four years ago, authorities expelled top-level public accident insurance company officers, redesigned operation and has launched a criminal investigation into reports of conflicts of interest, embezzlement and misappropriation of $1billion.

Today, probe involving public compensation insurance fund continues in silence as prosecutors face possible limitations statutes that would bar of criminal charges and civil prosecution.

The last event publicly occurred at 18 months, when a search warrant has been issued to a former member of the Board of Directors in Redding, about 150 miles north of Sacramento.

"Seems to have fallen off the coast of the face of the Earth", said Mark Webb, Vice President for the Pacific Compensation Insurance Co. in the hills of Agoura rival. "When you think about how this exhausted publicly, it seems that there is at least enough take it to the grand jury."

Legislators also begin to ask questions about the case of funds.

"It is time that the legislature of check to the district prosecutor's Office" and the funds, said the Chairman of the Committee of Insurance House Jose Solorio (Santa Ana - D). "Everyone merit if this case is being solved or if it is still under consideration."

Former Senator Mike Machado, now member of the Fund of the State, says "the length of time" and apparent lack of activity was frustrated by the investigation. He refused to comment further on the matter.

President of the company, Jeanne Cain said only that "funds has long moved past events" of 2007.

The investigation led by San Francisco the Atty Kamala Harris, whose Office has established a working group which included the California Highway patrol and the State Insurance Department.

But Harris leaves in two weeks for his new job in the California Attorney General. Erica Derryck, a spokesman for the district prosecutor's Office said only that "is an investigation and active by the Working Group".

Insurance Commissioner Steve Poizner, the Bureau has published an audit though some funds three years ago stated that staff had concluded its work on the case and that he could not discuss the status of the investigation.

$ 21 Billion company is an essential element of the California economy, because it is the insurer of last resort, especially for small and medium-sized companies who cannot obtain comp coverage affordable workers, which requires the State. This year, the national fund is expected to write from 1.1 billion in premiums for 150 000 employers in California.

Disorders in the Fund began in the fall of 2006, when the Office of the Governor pressure two members of the Board to resign on potential conflicts of interest. Less than six months later, guiding the Fund of the State, after having conducted an internal review, ousted President of the company, James Tudor and a vice President, Renee Koren.

Examination discovered practical financial bad involving sale of political discount by associations outside with links to some members of the Board.

An audit of insurance issued in December 2007 revealed that while Frank DelRe and Kent Dagg was the Board of Directors, DelRe Long beach administrators assurance received 140 million dollars in funds of fresh marketing and the construction trades associations connected with Dagg received $ 125 million.

Audit said conflict potential interest has occurred Dagg participated in decisions raise commissions paid to companies - including their own - administered at discounted price strategies Group associations like employers, such as contractors and restaurants and DelRe.

Confidential State funds Council minutes indicated that the two men had no conflict of interest, the audit said. But "the fact that the jury members may have gained financially from the decision of the Fund creates the appearance of a potential conflict", said Auditors.

Since then, the investigation has been largely quiet.

Legal experts said time could be missed.

Laws more felony in the State, including fraud, require the prosecution within three years of the crime alleged, that the prosecutors have flexibility in some cases. Civil law carry limits for four years. Some criminal charges, such as the misappropriation of public funds, have no limitation.

"It comes to complex cases and take some time, said Robert Fellmeth, Director of the Center for Public Interest Law at the school of the University of San Diego law and a former San Diego County assistant district attorney."

"But if you have the Department of insurance, road patrol of California and the Attorney for district of San Francisco all resources that contribute to an investigation, they should know where they stand after four years," he said. "These three organizations have much power."

If evidence is not strong enough, investigators must say the public and their targets suspected that the probe has officially ended, he said.

"Perhaps they are not likely to cause or it turns out that this is just the circumstances of the bad markets, stupidity or perhaps there is no law covering" situation, said Fellmeth. "" "" And then, fine, they should stop wasting resources on investigation or at least tell people that it is more and there is no grand jury from. "We're just".

Sam Sorich, President of the California insurance companies, the insurance industry trade group said it is flabbergasted that nothing has happened publicly in the investigation.

"It seems a little odd that was there was no action on the case," said Sorich. "The allegations were very disturbing."

Marc.lifsher@LAtimes.com