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WASHINGTON, Nov 4 (Reuters) - J.P. Morgan Securities Inc. will pay $75 million to settle charges in an unlawful payment scheme in the sewer financing of Jefferson County, Alabama, the Securities and Exchange Commission said on Wednesday. The agency said J.P. Morgan Securities will pay a penalty of $25 million and pay the county, which includes the city of Birmingham, $50 million. J.P.
Morgan also will forfeit more than $647 million it claimed in termination fees on the swaps that left the county on the edge of bankruptcy. It is the second charge the SEC has brought in connection with the sewer derivatives and swaps. Two former managing directors at JPMorgan Securities were also charged.
The bankers made unlawful payments to win business and earn fees, Robert Khuzami, director of the SEC's enforcement division, said in a statement. The commission said that J.P. Morgan Securities did not disclose any of the payments it received or its conflicts of interest in the swap agreements. In Birmingham, a county official welcomed the announcement by the SEC. "Jefferson County's situation is greatly enhanced and appears to be improving every minute," County Commission President Bettye Fine Collins told reporters. (Reporting by Lisa Lambert; additional reporting by Melinda Dickinson in Birmingham; Editing by Kenneth Barry) Keywords: MUNICIPALS/JEFFERSONCOUNTY (lisa.lambert@thomsonreuters.com; +1-202-898-8328; Reuters Messaging: lisa.lambert.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.
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