JPMorgan countersues collapsed Lehman Brothers

BANGALORE (BestGrowthStock) – JPMorgan Chase is countersuing Lehman Brothers Holdings saying the bankrupt U.S. investment bank misled it into lending more than $70 billion in the belief it would be repaid in full.

Early this year, Lehman Brothers sued JPMorgan, accusing the second-largest U.S. bank of illegally siphoning billions of dollars of desperately-needed assets in the days leading up to its record bankruptcy.

Late on Wednesday in a New York court filing, JPMorgan said it loaned more than $70 billion to Lehman Brothers on Sept 18, 2008, believing it would be paid back in full after British bank Barclays’s purchase of Lehman’s U.S. brokerage business.

However, Lehman helped Barclays cherry pick the securities it wanted to buy back and left behind billions of dollars of the worst securities, JPMorgan said in the filing.

Following the commencement of Lehman’s liquidation on Sept 19, 2008, JPMorgan said it was stuck with more than $25 billion of loans secured by Lehman’s toxic securities.

“Only later was JPMorgan able to determine that the position in which it unexpectedly found itself was the result of collusion and deception by Lehman and Barclays,” JPMorgan said in the court filing.

In its countersuit, JPMorgan has requested damages and asked the court for protection from Lehman’s claims of losses and liabilities against it.

(Reporting by Sakthi Prasad in Bangalore; Editing by Matthew Jones)

JPMorgan countersues collapsed Lehman Brothers