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J.P. Morgan has to pay $153.6 million for misleading investors

By Dian Vujovich

At last, hoodwinked investors have a chance of getting their money back.

On this the first day of summer 2011, the SEC announced the following: “The Securities and Exchanged Commission today announced that J.P. Morgan Securities LLC will pay $153.6 million to settle SEC charges that it mislead investors in a complex mortgage securities transaction just as the housing market was starting to plummet. Under the settlement, harmed investors will receive all of their money back.”

Another part of the deal requires J.P. Morgan to “improve the way it reviews and approves mortgage securities transactions.” That’s putting it kindly. Or softly. But it’s a start.

If you’ve forgotten what this investment bank did, here’s a refresher from that same source: “J.P Morgan marketed highly-complex CDO investments to investors with promises that the mortgage assets underlying the CDO would be selected by an independent manager looking out for investor interests,” said Robert Khuzami, Director of the Division of Enforcement. “What J.P. Morgan failed to tell investors was that a prominent hedge fund that would financially profit from the failure of CDO portfolio assets heavily influenced the CDO portfolio selection. With today’s settlement, harmed investors receive a full return of the losses they suffered.”

Staying on-topic but moving away from J.P. Morgan, there have only been 66 entities or individuals charged by the SEC for misconduct during our nation’s biggest financial crisis. A crisis that spinners try to say was the result of the little guy borrowing more than they could afford when it actuality was the financial industry’s big guys needs for bottom line growth that created the entire mess.

Believe it or not, there have only been 66 entities or individuals charged by the SEC for misconduct in this financial crisis. And, only 32 corporate and senior corporate officers charged. Compare that to the personal despair, life challenges and difficulties tens of thousands upon thousands of individuals have endured during this Great Recession and it becomes crystal clear how much weight those with power and money wield in America.

On the other hand, the SEC has issued $1.34 billion in penalties, disgorgement and money relief.

If you have been a victim of any financial fraud schemes, and purchased investment products from one of the list of blueblood-type financial institutions hawking them —that, btw, intentionally mislead investors— here’s hoping you’ll get your money back.

Read the entire SEC press release regarding J.P.Morgan at: http://www.sec.gov/news/press/2011/2011-131.htm .

Find out all the firms the SEC has taken action against during the financial crisis at

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