JP Morgan's role in the MF Global bankruptcy will be investigated by the brokerage trustee James Giddens per a court filing he made yesterday, Bloomberg reported.
When MF Global first filed for bankruptcy, JP Morgan was listed as its top creditor with a debt of $1.2 billion. But the company later clarified that the $1.2 billion wasn't from the bank itself, but a syndicated loan that the bank helped issue. MF Global also tapped a line of credit from JP Morgan in its last days, when the stock was tanking.
The trustee has said that the investigation will concern JP Morgan's role as a "lender," so bear in mind that this may not delve into the other roles the bank has played for MF Global, which are aplenty...
JP Morgan served as one of the main custodian banks for MF Global's segregated client accounts, meaning customers posting more collateral for their futures positions would deposit them into JP Morgan bank accounts that were linked to MF Global….
Read more: http://www.businessinsider.com/jp-morgans-role-in-mf-global-will-be-investigated-2011-12
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