JPMorgan sued by Lehman Brothers' estate

27 May 2010

JPMorgan is being sued by the Lehman Brothers' estate in regard to claims it helped push the firm into bankruptcy.

At the time of Lehman Brothers' collapse in 2008, JPMorgan was its main short-term lender and the filing accuses the bank of using its access to Lehman's accounts to up its demands for collateral.

It is said that in the days leading up to the bank's failure, JPMorgan demanded $8.6 billion from Lehman to allow it to access vital clearing services.

"With this financial gun to Lehman's head, JPMorgan was able to extract extraordinarily one-sided agreements from Lehman literally overnight," the lawsuit alleged.

It added that the billions "rightfully belong to the Lehman estate and its creditors".

Last month, Mary Schapiro, the chair of the Securities and Exchange Commission, said the body did not have the necessary resources or mindset to properly regulate the behaviour of Lehman Brothers in the years and months before its failure.

By Gary Cooper

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