AdChoices J.P. Morgan to settle most of Lehman suit for $1.42 billion

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J.P. Morgan & Co. has agreed to pay the remnants of Lehman Brothers Holdings Inc. $1.42 billion in cash to settle much of the failed investment bank’s lawsuit that accused J.P. Morgan of illegally siphoning billions of dollars from Lehman before its collapse.

The settlement comes after  a federal judge last fall ruled for J.P. Morgan, saying the bank didn’t abuse its leverage as Lehman’s primary clearing bank to force the investment bank to hand over more collateral in the weeks before its September 2008 collapse.

The deal, unveiled Monday night in a filing in U.S. Bankruptcy Court in New York, resolves the bulk of Lehman’s $8.6 billion lawsuit against J.P. Morgan and the bank’s counterclaims against Lehman.

By Patrick Fitzgerald

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