The Lehman Brothers bankruptcy estate has filed a lawsuit against JPMorgan Chase executives, including CEO and president Jamie Dimon, alleging that JPMorgan illegally siphoned billions of dollars from Lehman in its last days, before the bank filed for bankruptcy.
The Lehman estate seeks the return of $8.6 billion.
Specifically, the lawsuit alleges that Dimon and others coerced Lehman to turn over $8.6 billion in collateral to JPMorgan in September 2008. It further alleges that JPMorgan was privy to Lehman’s weakening financial situation, as it was Lehman’s clearing bank.
In a prepared statement, JPMorgan said, “The lawsuit is ill-conceived, meritless and we will vigorously defend it.
“As the examiner's report made clear, it was the ill-advised decisions of Lehman itself, and its principals, to take on perilous leverage, and not any conduct by JP Morgan that led to firm's demise and enormous losses to its various constituencies.”
“JPMorgan was virtually alone among major financial institutions in continuing to lend to Lehman until it filed for bankruptcy and even after it filed for bankruptcy.
“Even during the crisis—JPMorgan Chase provided Lehman more than $100 billion in credit on a daily basis. Lehman repeatedly told JMPC that it had excess liquidity that should have allowed it to comfortably furnish the collateral requested.”