JPMorgan Chase & Co. says the Securities and Exchange Commission may bring civil charges against the bank related to the bidding of instruments tied to municipal bonds.
JPMorgan said in a regulatory filing late Monday that the Philadelphia regional office of the SEC sent the bank a "Wells notice" telling the bank that it is "considering recommending that the Commission bring an enforcement action" against JPMorgan's securities division. The regulators alleged that the division "violated the federal securities laws 'in connection with the bidding of various financial instruments associated with municipal securities.' "
Municipal securities are bonds issued by states, cities or other government entities. U.S. regulators have been probing the possibility of bid-rigging in the municipal bond markets, and has contacted a number of financial services companies about their municipal securities activities.
JPMorgan did not say in the filing whether the notice was related to bidding practices at Bear Stearns Cos., which JPMorgan is in the midst of acquiring. In April, Bear Stearns said the SEC was considering a civil injunctive action or an administrative hearing regarding the company's bidding process with municipal securities.
JPMorgan shares fell $1.76, or 3.7 percent, to $45.48 Tuesday.
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