What kind of a world do we live in when you can't even buy a small town mayor and county commissioners anymore? At least that's the question former J.P. Morgan Securities managing directors Charles LeCroy and Douglass MacFaddin are asking themselves this morning.
These are the guys who allegedly funneled over $8 million to friends of Jefferson County, Alabama, commissioners to ensure the commissioners would vote to make JPM the managing underwriter of the county's bonds and swaps. In a twist only a Wall Street banker could truly appreciate, they then wrapped the $8 million in bribes into the repayment schedule on the instruments, essentially making the county pay the bribes to their own commissioners. Now that's shady, even by our standards.
J.P. Morgan Securities did not disclose any of the payments or conflicts of interest in the swap confirmation agreements or bond offering documents, yet passed on the cost of the unlawful payments by charging the county higher interest rates on the swap transactions."The transactions were complex but the scheme was simple. Senior J.P. Morgan bankers made unlawful payments to win business and earn fees," said Robert Khuzami, Director of the SEC's Division of Enforcement.
JPM Securities, without admitting anything, has agreed to pay a $25 million fine, make a payment of $50 million to Jefferson County, and forfeit over $647 million in termination fees.
LeCroy and MacFadden refused to settle, however, so it looks like the Feds will go after them personally. It's not looking good for these clowns, as the SEC has taped conversations of them bragging about "payoffs", "giving away free money", and "the price of doing business".
Shit, hopefully there's still some honest people out there.
All the honest guys work at 85 Broad.
Those two just threw a meatball to the pitchfork wielders.
Yeah, this is pretty sleazy -
It's going to be fun to watch the new SEC play whack-a-mole with these types of findings over the next year or so
"...made more than $8 million in undisclosed payments to close friends of certain Jefferson County commissioners. The friends owned or worked at local broker-dealer firms that performed no known services on the transactions..."
What offering DOESN"T pay like 6 extra firms $ for doing nothing?
funny, the lease at 85 broad is about to expire
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