Reply #12: JPMorgan's $425 Mln IPO Accord May Lead Other Banks to Settle

[Mojorabbit]

April 21 (Bloomberg) -- JPMorgan Chase & Co.'s decision to pay $425 million to settle legal claims that it rigged initial public offerings during the 1990s Internet stock boom may lead other banks to resolve their roles in the case.

JPMorgan, the No. 3 U.S. bank by assets, was the lead underwriter in 11 of the IPOs that are at issue and part of a syndicate in 180 other offerings, said Melvyn Weiss, a lawyer for investors suing the banks. Banks that played a larger role in the IPO process may wind up paying more to settle, he said.

``This is a major breakthrough,'' Weiss said. Lawyers for JPMorgan and the investors have reached a ``memorandum of understanding'' and must still resolve details of the settlement, he said.

The excesses of the stock-market bubble continue to haunt large U.S. banks such as JPMorgan, which has paid more than $4.2 billion to settle claims it published biased research and helped Enron Corp. and WorldCom Inc. defraud investors.
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`The deal with JPMorgan implies an aggregate recovery in the billions,'' said Howard Sirota, one of the lead lawyers in the case and a partner at New York-based Sirota & Sirota. ``It will likely have a catalytic effect on the remaining defendants.''

JPMorgan spokesman Joe Evangelisti said that an agreement had been reached ``in principle.''

``It would have no material adverse effect on our financial results,'' he said
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