Brokerage customers of bankrupt Lehman Brothers Holdings will get $800 in cash and stock under a court-approved JPMorgan settlement.  U.S. Bankruptcy Judge James Peck approved the accord, struck in April between JPMorgan and the Lehman trustee.  JPMorgan had been the main clearing bank for the Lehman brokerage, processing billions of dollars of transactions and lending it tens of billions daily, according to court filings.

While some loans were secured by securities in the brokerage’s accounts, JPMorgan didn’t have a valid lien on the $800 million in customer property that is being returned, according to filings.  This deal comes after 2 years of investigation and close cooperation with JPMorgan.  JPMorgan notes the settlement would have “no material financial impact,” as most of the assets had already been set aside to satisfy potential claims by the trustee. 

Separately, JPMorgan is seeking dismissal of an $8.6 billion lawsuit by the Lehman parent.  The brokerage bankruptcy case is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, U.S. Bankruptcy Court, Southern District of New York (Manhattan).   [Bloomberg, 6/23/11]