JP Morgan has paid $153.6 million to settle SEC charges that it misled investors as it scrambled to offload mortgage-backed securities before the 2007 collapse in the housing market, reports Reuters. " We are soooo pregnant with this deal," wrote an exec in a 2007 email, referring to distribution of a $1.1 billion in risky securities. "Let's schedule the caesarian, please!"
The SEC says JP Morgan allowed hedge fund clients to structure complex securities and then bet against them while it aggressively pushed the products to investors unaware of the funds' involvement. Plenty more cases relating to the financial crisis are on the way, according to regulators. "We have a pretty full pipeline of post-crisis cases," said a spokeswoman. "They relate to disclosure failures, particularly around structured products, accounting issues and so forth."