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JPMorgan Chase & Co. was sued by a Louisiana police pension fund for alleged securities fraud tied to a trading loss of at least $2 billion, Bloomberg News reported on Friday. The Louisiana Municipal Police Employees Retirement System claimed that the biggest U.S. bank and top officials including Chief Executive Officer Jamie Dimon misled investors about its risk management and financial condition from February 2010 to May 2012. The police pension plan is seeking class-action status on behalf of all who bought JPMorgan Chase common stock from February 2010 to May 2012, a number which may be in the tens of thousands, according to the complaint. It is also seeking unspecified compensatory and punitive damages.

A growing number of community banks are deciding it is time to put out the "for sale" sign after being frustrated by costly new regulations, the Wall Street Journal reported today. Other bankers are throwing in the towel because their companies have limited growth prospects in a period of weak loan demand, low interest rates and thinning profit margins. With more than 90 deals announced so far this year, 2012 is shaping up to be the biggest year — as measured by number of deals — for bank mergers since 2007, when there were 286 transactions.

Global financial regulators, after reaching a consensus last year on tougher capital rules to govern banks that would roil the world economy if they collapsed, will try to hammer out a deal next week on controls for lenders with the potential to bring down national economies, Bloomberg News reported yesterday. The Basel Committee on Banking Supervision plans to publish draft rules for systemic lenders that are not covered by last year's plans requiring global banks deemed too-big-to-fail to hold additional capital of as much as 2.5 percent of their risk-weighted assets. To reach a deal, nations in the group will need to bridge differences over whether the planned rules for domestically systemic banks should also apply to subsidiaries of the global lenders targeted last year. The split centers on whether local regulators should be free to impose stricter capital rules on these units than those the parent bank must follow.

The Federal Reserve has been repaid for its roles in the U.S. government bailout of American International Group Inc. in 2008 and the rescue of Bear Stearns Cos. earlier that year, Bloomberg News reported yesterday. The central bank’s $53.1 billion of loans to vehicles called Maiden Lane and Maiden Lane III, created to help save the companies, were paid back with interest, the Federal Reserve Bank of New York said yesterday. A separate entity, Maiden Lane II, finished being unwound through sales of mortgage assets earlier this year. Taxpayers remain at risk in the wake of the September 2008 bailout of AIG, once the world's largest insurer, which swelled to $182.3 billion in value. The Treasury Department still owns 61 percent of the New York-based company and needs to sell the shares at an average price of $28.72 apiece to break even. The Fed may still generate profits as it disposes of remaining assets in the vehicles.

Deloitte & Touche LLP has agreed to pay $19.9 million to settle shareholder litigation alleging that the firm misled investors about the health of its client Bear Stearns Cos. before the investment bank's 2008 demise, the Wall Street Journal reported yesterday. The settlement was disclosed in papers filed in federal court in New York on Monday. It resolves claims by an investor group led by the State of Michigan Retirement Systems that Deloitte, Bear Stearns's outside auditor, made misstatements and omitted information in its audits of the bank's financial statements. Former Bear Stearns executives, including former chief executives James E. Cayne and Alan D. Schwartz and former chairman Alan "Ace" Greenberg, agreed to a $275 million settlement last week over related allegations that they deceived investors about the firm's prospects and financial well-being.

JPMorgan Chase is "likely" to try to recover compensation from executives responsible for a recent multibillion-dollar trading blowup, according to testimony from JPMorgan CEO Jamie Dimon yesterday before the Senate Banking Committee, the New York Times' DealBook blog reported yesterday. Dimon assured lawmakers that the bank's board was investigating the trading losses at the chief investment office. Once the investigation is complete, he said, the bank will decide whose paychecks to pursue. "When the board finishes the review, you can expect we'll take proper corrective action," Dimon said. "There's likely to be clawbacks."

Click below to read Dimon's prepared testimony before the Senate Banking Committee yesterday:
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&…

After years of legal battles, Lehman Brothers Holdings Inc. has sold two large California housing developments for $60 million to one of its main real estate partners during the boom years, the Wall Street Journal reported today. The deal is the latest sign that Lehman, little by little, is extricating itself from the soured real estate deals that helped bring the bank to its knees, resulting in the largest bankruptcy filing in U.S. history in October 2008. Lehman's sale of the Fairway Canyon and the Delta Coves master-planned projects to SunCal Cos. also comes as major land developers are moving ahead with housing projects again. SunCal plans to finish out the projects along the lines of their original plans, using funds from private-equity firms Colony Capital LLC and Dune Capital Management LP, according to Stephan Elieff, SunCal's president.

While JPMorgan Chase & Co. CEO James Dimon will apologize today before the Senate Banking Committee for the trading miscues that have cost the company at least $2 billion, he is also going to highlight a combination of overconfidence, poor judgment and faulty risk controls, the Wall Street Journal reported today. Dimon will push back on any implication that the incident is lastingly detrimental to the largest U.S. bank by assets. "We will not make light of these losses, but they should be put into perspective," Dimon said in prepared testimony. "We will lose some of our shareholders' money—and for that, we feel terrible—but no client, customer or taxpayer money was impacted by this incident."

Click here for more information on today’s Senate Banking Committee hearing.
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&…

Some top JPMorgan Chase & Co. executives and directors were alerted to risky practices by a team of London-based traders two years before that group's botched bets cost the bank more than $2 billion, the Wall Street Journal reported today. Interviews with more than a dozen current and former members of the bank's Chief Investment Office, the unit responsible for the losses, indicate that discussions about reining in London traders started as early as 2010. Certain directors were briefed then on a foreign-exchange-options bet that went bad, and were told that the trader responsible would not be allowed to go overboard in the future. Last year, top CIO executives set a plan to roll back a separate set of large London trades—only to learn later that the plan had not been followed correctly. The concerns dating back to 2010 show that JPMorgan had an opportunity to avoid the bungled trades, which over time could cost the bank as much as $5 billion.

Most of the senior executives at MF Global Holdings Ltd. were not registered with commodities regulators, meaning the executives cannot be charged with supervision failures related to the firm's collapse, the Wall Street Journal reported today. Among top officials at MF Global, only former Chairman and Chief Executive Jon S. Corzine was registered with the Commodity Futures Trading Commission when the New York company filed for chapter 11 protection in October, regulatory records show. Those who were not registered include Henri Steenkamp, MF Global's finance chief, company treasurer Vinay Mahajan and Edith O'Brien, an assistant treasurer responsible for approving transfers and monitoring their impact on customer accounts.