Lehman Brothers Holdings Inc. and its creditors’ committee filed a complaint yesterday in bankruptcy court against JPMorgan Chase Bank NA , alleging that the New York-based bank “stripped a faltering Lehman Brothers of desperately needed cash” in the days and weeks before the commencement of Lehman’s bankruptcy in September 2008.
Market-moving trades by JPMorgan Chase & Co.’s chief investment office probably will force regulators to seek more detail on banks’ derivatives positions to help them distinguish risk management from speculation.
JPMorgan Chase & Co. trader Bruno Iksil’s outsized bets in credit derivatives are drawing attention to a little-known division that invests the company’s reserves and fueling a debate over whether banks are taking excessive risks with federally insured and subsidized money.
A JPMorgan Chase & Co. trader of derivatives linked to the financial health of corporations has amassed positions so large that he’s driving price moves in the $10 trillion market, traders outside the firm said.
Lehman Brothers Holdings Inc. sued JPMorgan Chase & Co. to recover tens of billions of dollars in “lost value,” accusing the bank of precipitating its downfall and preventing it from winding down in an orderly fashion.