JPMorgan Securities to Settle Fraud Charges
RENEE MONTAGNE, Host:
NPR's Jim Zarroli reports.
JIM ZARROLI: The Securities and Exchange Commission said J.P. Morgan Securities sold a complex mortgage backed security to a group of institutional investors in 2007. But it allegedly failed to tell the investors that the mortgages underlying the security had been selected by a hedge fund called Magnetar, and Magnetar had shorted some of those mortgages, which means it bet they would fail, says SEC Enforcement director Robert Khuzami.
ROBERT KHUZAMI: In truth, Magnetar capital played a substantial role in the selection of those mortgage assets and stood to profit from the failure of the assets in the CDO portfolio.
ZARROLI: Jim Zarroli, NPR News, New York.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.