JPMorgan Chase & Co. will pay $1.42 billion in cash to resolve most of a lawsuit accusing it of draining Lehman Brothers Holdings Inc. of critical liquidity in the final days before that investment bank's September 2008 collapse, Reuters reported yesterday. The settlement was made public yesterday, and requires approval by U.S. Bankruptcy Judge Shelley Chapman. It resolves the bulk of an $8.6 billion lawsuit accusing JPMorgan of exploiting its leverage as Lehman's main "clearing" bank to siphon billions of dollars of collateral just before Lehman went bankrupt on Sept. 15, 2008, triggering a global financial crisis. Lehman's creditors charged that JPMorgan did not need the collateral and extracted a windfall at their expense.
