By David Henry
NEW YORK (Reuters) - JPMorgan Chase & Co
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The deal, which includes 25 state attorneys general and five federal regulators, is the biggest yet in a continuing industry-wide investigation.
Since December, Bank of America Corp
Former JPMorgan employees submitted sham bids when seeking to provide derivatives to municipalities and not-for-profit organizations, law enforcers said. The bank also communicated with competitors to fix prices as part of a scheme that began as early as 1997 and continued into 2006, law enforcers said.
From JPMorgan and other banks in the industry, nine former employees have pleaded guilty to crimes and nine others have criminal charges pending, according to a statement from the U.S. Department of Justice.
The bank itself avoided prosecution for bid-rigging and manipulation by cooperating and admitting what happened as well as agreeing to pay fines and restitution and put in place new controls over employees, according to the Justice Department.
The department said it has agreed not to prosecute as long as the bank "satisfies its ongoing obligations" under its settlement agreement.
"This fraudulent conduct completely manipulated the playing field and left public entities like governments and nonprofits at a serious disadvantage," New York Attorney General Eric Schneiderman said in a statement.
JPMorgan said in its own statement that "the firm's policies -- both now and during the period in question -- expressly prohibit the conduct that gave rise to these proceedings."
The bank said it has tightened its supervision and set up new surveillance programs to ensure compliance with the law. It dissolved its municipal derivatives desk in 2008.
While the bank said it is paying $211.2 million, the SEC put the figure at $228 million. JPMorgan spokesman Joseph Evangelisti said the SEC's figure double-counts $17 million which is being distributed to various regulators, municipalities and not-for-profits.
(Reporting by David Henry, additional reporting by Karey Wutkowski and Jeremy Pelofsky in Washington and Joan Gralla in New York; Editing by Matthew Lewis, Bernard Orr and Carol Bishopric)
(Clarifies in paragraph four and bullet point that not all charged employees had worked at JPMorgan. Corrects figure in paragraph 11 to $211.2 million from $211.2)