Securities News Releases

Monday, September 21, 2009
Contact: Laura Egerdal, (573) 526-0949

Carnahan Wraps Up JP Morgan Auction Rate Securities Case

Missouri investors received more than $28 Million in returned savings

- Secretary of State Robin Carnahan announced today that her office finalized a consent order with JP Morgan Chase & Co., returning more than $28 million in frozen savings to Missouri investors. JP Morgan is the seventh major firm to sign an agreement with Carnahan's office regarding auction rate securities, bringing the total amount returned to Missourians to over two billion dollars. Not all firms have repaid their clients, however, and Carnahan is fighting for those left without access to investments promised to be safe and "same as cash."

The consent order signed today covers Missouri individual and small business clients and was completed by JP Morgan earlier this year. The Missouri Investor Education and Protection Fund, used for educational initiatives across the state, will also receive an $86,000 payment from the firm.

"I am pleased that JP Morgan has joined nearly two dozen firms nationwide doing the right thing for their investors. The failure of other firms to do the same is inexcusable," Carnahan said. "Missourians with frozen savings cannot continue to wait. These companies must be held accountable, and I will continue to pursue resolutions that put investors first and give them access to their savings as promised."

Carnahan has proven willing to take action where investors' interests are not being promoted. After broker Stifel, Nicolaus and Company failed to agree to an adequate repurchase plan, Carnahan filed a civil enforcement action against Stifel in March for violations of state securities laws. Stifel has since announced a drawn-out buyback plan, but it will leave tens of millions of dollars for repurchase until the summer of 2012.

In the coming months, the Securities Division in Carnahan's office will finalize settlements and repurchases with several other firms. In addition, the Securities Division has active investigations into the auction rate securities activities of several other brokers, and expects to announce formal actions or resolutions in many of those matters before the end of the year.

For more information regarding investments and fraud protection, visit the Secretary of State's online Missouri Investor Protection Center at or call the toll free Investor Protection Hotline at 1-800-721-7996.

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To find out more about Missouri's Secretary of State's office, visit

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