Business Digest: Treasury gets $936 million from J.P. Morgan warrants

J.P. Morgan warrants fetch $936 million

The Treasury Department has received $936.1 million in the sale of warrants it had received from J.P. Morgan Chase as part of the support it provided the bank during last year’s financial crisis.

Treasury on Friday said it sold more than 88.4 million warrants in an auction Thursday at a price of $10.75 each. Warrants allow the holder to buy stock in the future at a fixed price. The conversion price for the warrants is $42.42 per share. Once the bank’s stock hits that price, the warrants can be converted into stock worth $3.75 billion.

J.P. Morgan had received $25 billion in support from the bailout fund and paid that money back in June. The sale of the 88.4 million warrants was the bank’s remaining tie to the bailout fund.

– Associated Press

SEC has widened Bank of America probe

The Securities and Exchange Commission has expanded its probe of Bank of America to include the bank’s possible failure to disclose mounting losses at Merrill Lynch, a top agency official said Friday.

The SEC has been pursuing civil charges against Bank of America over the failed disclosure to shareholders of bonuses to Merrill employees.

But when Rep. Dennis J. Kucinich (D-Ohio) asked at a hearing whether the agency had widened its investigation to include the disclosure of losses at Merrill, SEC Enforcement Director Robert Khuzami said: “That’s a yes.” The SEC has been “and [is] looking at all aspects” related to Bank of America’s disclosures to shareholders before the merger was approved last December.

Bank of America “is the test case” for the SEC’s enforcement efforts, Kucinich declared.
[Washington Post]