City A.M. Reporter
JP Morgan Securities has agreed to pay $75m (£45m) to settle charges in an unlawful payment scheme in the sewer financing of Jefferson County, the Securities and Exchange Commission (SEC) said yesterday.<br /><br />The agency said JP Morgan Securities will pay a penalty of $25m and pay the Alabama county, which includes the city of Birmingham, $50m.<br /><br />JP Morgan also will forfeit more than $647m it claimed in termination fees on cancelled interest-rate swap contracts, which left the county on the edge of what would have been the biggest municipal bankruptcy in US history.<br /><br />The federal regulator had accused the firm of making unlawful payments to friends of public officials to win municipal bond business in the county. <br /><br />It is the second charge the SEC has brought in connection with the sewer derivatives and swaps.<br /><br />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.<br /><br />The commission said that JP 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.<br /><br />“Jefferson County’s situation is greatly enhanced and appears to be improving every minute,” said county commission president Bettye Fine Collins.