JPMorgan Chase & Co. has agreed to a settlement worth more than $700.0 million over federal regulators' charges that it made unlawful payments to friends of public officials to win municipal bond business in Jefferson County, Ala. The Securities and Exchange Commission announced the settlement with JPMorgan, which canceled interest-rate swap contracts with the county worth $700 million in March. The move lowers the county's bond debt to about $3.2 billion from $3.9 billion. The company did not admit or deny the SEC allegations in agreeing to pay a $25 million civil fine and a $50 million payment to the county, and to forfeit $647 million in termination fees it claims the county owes from the canceled swap agreements. JPMorgan also was censured and agreed to refrain from future violations of the securities laws. In a civil lawsuit filed, the SEC also accused two former managing directors of JPMorgan, Charles LeCroy and Douglas MacFaddin, of securities law violations. The agency is seeking unspecified restitution from them. They plan to contest the charges. The SEC alleged that JPMorgan, LeCroy and MacFaddin made about $8.2 million in undisclosed payments in 2002 and 2003 to close friends of several Jefferson County commissioners. The money went to local brokerage firms whose principals or employees were friends of the county officials, the SEC said. Starting in July 2002, LeCroy and MacFaddin solicited the county for a $1.4 billion sewer bond deal. The SEC said that, swayed by the payments, the county commissioners voted to select JPMorgan's securities division as managing underwriter of the bond offerings and its affiliated bank as swap provider for the transactions. JPMorgan failed to disclose any of the unlawful payments or conflicts of interest in the bond offering documents, but passed on the cost of the payments by charging the county higher interest rates on the swap transactions. The settlement with the SEC does not impair any outstanding Jefferson County bonds and JPMorgan continues to work to achieve a responsible restructuring of Jefferson County's financial affairs.

JPMorgan Chase & Co. intends to look at acquisition opportunities. Chief Executive of retail financial services, Charlie Scharf stated that JPMorgan would looks for branches networks that could fit with its growth plans. He said: "If there is a specific area that we know next year, and the year after, and the year after that, we want to build 20 branches a year, if we can go and buy a bank with 25, 30 branches at the right price, with the right protection we would consider doing that." He added: "We have actually looked at all the banks in the country. We have looked at which ones we would be interested in based upon those cutoffs and based upon the attractiveness, so if they do become available we are kind of ready to go. We have got a lot of room to do the things that we want to do if they become available." He said that any deal in markets where JPMorgan is not present would have to be significant to set a strong footprint.

JPMorgan Chase & Co. announced that it has been selected to provide global custody and securities lending services for the investment options that are available within the variable annuity and variable life insurance contracts offered by Jackson National Life Insurance Company(R) and/or Jackson National Life Insurance Company of New York(R). The investment options in this mandate total approximately $38 billion of net assets as of September 30, 2009.