The Conway City Council agreed to accept a settlement from J.P. Morgan Chase during its regularly scheduled meeting Tuesday night.
The city is one of the affected entities in a $65.5 million settlement the banking corporation has offered at the close of a three year investigation by state attorneys general. The settlement amount is $28,456, the amount of which will be returned to Conway Corporation.
According to the settlement documents, the City of Conway is due restitution after certain JPMC employees participated in an illegal scheme with brokers and other providers with whom they had relationships to put their own mutual financial interests ahead of those of the municipal bond derivative clients they represented.
City Attorney Mike Murphy recommended accepting the settlement, which would place Conway with many cities around the nation such as Cleveland, Ohio and Pittsburgh, Pa. Murphy said he found out while investigating the matter that Conway was the only city in Arkansas affected by the scheme.
“We would be giving up our right to sue as individuals or in a class action,” Murphy said. “But there are many unknowns there as well. The recovery could be greater or less, and I am thinking a bird in the hand is better.”
Murphy said between 2001 and 2005, one of the city’s bond issues was altered by JPMC.
“During this time the City of Conway was identified as an eligible party to enter into this settlement,” Murphy said.
According to Murphy, JPMC employees were “rigging bids and engaging in anti-competitive conduct” which caused bond issues to have a lower yield.
The council also approved a reimbursement agreement with Exxon Mobil pipeline for the city’s arterial loop project. According to Ronnie Hall of the city’s street department, the area immediately behind the Gold Creek Baptist Church is part of the south interchange phase of the Western Loop project.
Exxon is asking for $275,369.23 in advance to replace the coating of the existing pipeline. The work would include digging up the 100 feet of pipeline, blasting it and recoating it. The money would be used from the “pay as you go” tax and could be reimbursed out of the state contribution to the project.