JPMorgan Chase Hits Back at Lehman

JPMorgan Chase is countersuing Lehman Brothers alleging the bankrupt investment bank engaged in "collusion and deception" in 2008.
By Laurie Kulikowski ,

NEW YORK (

TheStreet

) --

JPMorgan Chase

(JPM) - Get Report

is countersuing

Lehman Brothers

alleging the bankrupt investment bank engaged in "collusion and deception" in 2008 in persuading JPMorgan to lend it more than $70 billion shortly after it filed for bankruptcy, according to the

Wall Street Journal

.

According to the

Journal

, the lawsuit was filed Wednesday with the U.S. Bankruptcy Court in Manhattan. In the suit, J.P. Morgan alleges that Lehman and

Barclays

(BCS) - Get Report

misled it to believe that the loans would be repaid in full.

Instead JPMorgan left with $25 billion of unpaid loans, primarily collateralized by Lehman's "most toxic" securities, according to several media reports citing the lawsuit.

Two years ago, Barclays ended up acquiring a large portion of Lehman's assets. Spokeswoman for both companies did not comment to the

Journal

.

Lehman had originally filed a lawsuit against JPMorgan back in May, alleging the bank drained it of billions as it collapsed and that JPMorgan CEO Jamie Dimon and other top executives used inside knowledge in order to seize Lehman during its downfall.

JPMorgan's collateral seizure in September 2008 contributed to Lehman's collapse after triggering a liquidity squeeze, the

Journal

said citing Lehman's lawsuit.

JPMorgan shares were rising 2.6% to $39.15 on volume of about 17 million at midday.

-- Written by Laurie Kulikowski in New York.

To contact the writer of this article, click here:

Laurie Kulikowski

.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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