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General Electric (NYSE:GE) has agreed to pay $70.4 million to settle a criminal probe and civil claims brought against the corporation for having allegedly conspired to rig bids on U.S. municipal bond deals, overcharging state and local governments on their investments.
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The deal will resolve investigations by the Justice Department, the Securities and Exchange Commission, and the Internal Revenue Service, as well as the attorneys general of 25 states. GE Funding Capital Markets Services, a former unit, is the fifth company to enter into a settlement as part of a more than five-year federal investigation.
“GE Funding’s former traders entered into illegal agreements to manipulate the bidding process on municipal investment contracts,” said Sharis A. Pozen, acting assistant attorney general in charge of the Justice Department’s antitrust division. “This anticompetitive conduct harmed municipalities as well as taxpayers.”
The settlement brings the total amount so far paid by companies to end the case to $743 million. Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), UBS (NYSE:UBS), and Wells Fargo (NYSE:WFC) previously settled similar cases.
GE’s settlement stems from an investigation into the conduct of three now-former GE employees between 1999 and 2004 at a unit of the finance division that was discontinued in April 2010, GE said in a statement today.
In that statement, GE said the settlement won’t have a “material impact” on earnings. It takes roughly $100 million in profit to yield 1 cent in per-share earnings at GE.
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