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JPMorgan Chase & Co. has agreed to pay $211 million after admitting one of its divisions rigged dozens of bidding competitions to win business from state and local governments.

J.P. Morgan Securities LLC made at least 93 secret deals with companies that handled the bidding processes in 31 states, the Justice Department and Securities and Exchange Commission said Thursday. Those deals allowed the bank to peek at competitors’ offers.

Banks help municipalities invest the money they raise from bond offerings so that they can earn interest before paying for projects. They compete by submitting to state and local governments the best yield they can offer.

The alleged bid-rigging deprived governments of a true competitive process that would produce the best returns on their investments, Assistant Attorney General Christine Varney said in a statement.

JPMorgan’s settlement covers complaints brought by the SEC, the Internal Revenue Service, bank regulators and 25 state attorneys general. Nearly a quarter of the money will go toward settling civil fraud charges brought by the SEC. A large portion will be divided among states, in part to pay restitution to victims of the fraud.

JPMorgan agreed to cooperate with the Justice Department’s investigation in exchange for not being prosecuted, the agency said.

The company admitted and accepted responsibility for the illegal conduct. It blamed it on former employees of a division that has since been shut down. The company said it “is pleased to have resolved this matter with its regulators.” It said the settlement will not affect its financial performance.

It was the second major federal settlement for the bank in the past month. JPMorgan settled civil fraud charges with the SEC in June. It agreed to pay $154 million for allegedly misleading buyers of complex mortgage investments as the housing market collapsed no teletrack payday loan.

One former executive of the bank’s securities unit, James Hertz, pleaded guilty in December to criminal charges related to the bid-rigging issue. He also is cooperating with authorities.

In all, the Justice probe has resulted in criminal charges against 18 former executives of financial services companies and one corporation. Including Hertz, nine of the executives have pleaded guilty.

Here’s how the money from Thursday’s settlement will be divided:

_ The SEC will receive $51 million to settle civil fraud charges.

_ JPMorgan will pay the IRS $50 million because its actions violated rules governing municipal bonds, which are tax-exempt.

_ The bank’s main regulator, the Office of the Comptroller of the Currency, will receive $35 million.

_ The settlement with the states is worth $92 million. That includes half of the $35 million JPMorgan agreed to pay the OCC. The settlements have a face value of $228 million because $17 million is counted twice.

JPMorgan’s agreement includes the District of Columbia and these states: Alabama, California, Colorado, Connecticut, Florida, Idaho, Illinois, Kansas, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Tennessee and Wisconsin.

Bank of America and UBS have agreed to settlements based on similar municipal bid-rigging charges brought by federal and state authorities. Bank of America Corp. agreed in December to pay more than $137 million. UBS AG agreed in May to pay more than $160 million.

JPMorgan shares rose 95 cents, or 2 percent, to $41.51 in early-afternoon trading Thursday.

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Bank of America is near to a deal to pay $8.5 billion to settle a lawsuit by investors who purchased mortgage securities that soured, handing a victory to a group of money managers including Pimco and BlackRock as well as the Federal Reserve Bank of New York.

The company’s board has yet to approve the settlement, but both sides are aiming to get it done by Thursday, according to an individual close to the negotiations. The timing is intended to take place before the second quarter ends.

Bank of America stock jumped 38 cents in after-hours trading to $11.19 a share after news reports of the deal.

The issue of how much the bank would have to compensate investors in mortgage securities it had assembled has been hanging over the shares since last fall. But the company does not anticipate having to raise capital or sell stock to come up with the money for the settlement.

The settlement was less than the tens of billions some investors feared Bank of America would have to shell out, but it will wipe out all of the company earnings in the first half of this year, while heightening the risks that other banks will be sued by investors who hold securities the banks assembled from home loans that have since defaulted my credit score.

“I think this is huge,” said Mike Mayo, a bank analyst with Credit Agricole in New York. “It’s about time the industry resolves issues from the financial crisis and focuses more on righting their companies and improving the economy. This is the most significant step since the financial crisis that helps do that.”

Last fall, analysts warned the toll from suits by these investors and other private holders could total tens of billions of dollars, but the proposed deal would lift some of that uncertainty. The securities affected by the deal come almost entirely from Countrywide, the subprime mortgage lender whose excesses have come to symbolize the excesses of the housing boom. Bank of America bought Countrywide in 2008.

The $8.5 billion settlement represents just a portion of the bank’s total exposure to faulty mortgage bonds. Analysts say it appears to cover about $56 billion of the roughly $222 billion of troubled loans that were bundled into securities, largely by the Countrywide Financial business in acquired in early 2008.

Other huge risks from the fallout of the subprime mortgage crisis still loom

The labour disputes at Canada Post and Air Canada have certainly caught the country’s attention. Stopping mail delivery and disrupting people’s travel plans, even for a short time, will do that.

Air Canada quickly reached a deal with its 4,000 striking customer service workers after the government threatened back-to-work legislation but it’s likely going to be a long, hot summer for the airline as several other unions are also at the bargaining table.

Meanwhile, Canada Post and its union face binding arbitration if the government has to pass back-to-work legislation to end the lockout It’s a messy situation.

One of the core issues in both disruptions is pensions. Get used to it. We are going to see a lot more disputes like these in the coming years. There is a clash of interests taking shape in our society. Employees are trying to protect what they regard as basic entitlements, one of the most important of which is pension plans. Meanwhile, corporations and governments, to an increasing extent, are realizing they can no longer afford the costs of Cadillac pension plans.

Both Air Canada and Canada Post are trying to cope with huge pension deficits, compounded in Air Canada’s case by the fact it now has more retirees than active employees to support them.

In both cases, management’s solution is to propose a two-tier system. Current employees can remain in the existing defined benefit (DB) plans, which guarantee a specific level of income at retirement — a guarantee the companies are obligated to fulfill if the plan runs short of money, assuming they are still solvent. New hires would be moved into a defined contribution (DC) plan, in which there is no income guarantee at the end. The amount of money each person receives depends on how much was contributed over the years and the investment performance of the money credited to each individual.

When it comes to providing a secure retirement, defined contribution plans suck. With no guarantee of income, there is no certainty. A stock market crash a few years before retirement could wipe out half the accumulated assets. It happened as recently as 2008-2009. No wonder the unions are fighting back.

Unfortunately, economic realities will probably defeat them. The private sector is increasingly turning away from defined benefit plans to embrace defined contribution plans or hybrids.

The 2011 Pension Risk Survey published by human resources consulting firm Towers Watson reported that 51 per cent of private-sector defined-benefit-plan respondents have now converted their plans to defined contribution for current or future employees. That was up from 42 per cent in 2008. A press release issued by the company said there is no indication the trend is relenting.

Towers Watson described the future of defined benefit plans as being at “a tipping point,” saying private-sector employers have “crossed a pension Rubicon.”

Ian Markham, Canadian retirement innovation leader at Towers Watson, added: “This year’s survey results show employers planning a conversion to DC are intent on doing so regardless of whether economic conditions improve, or a more sponsor-friendly legislative environment appears, or even in lieu of less dramatic changes to plan design or investment strategy.”

The upshot is that if you work in the private sector and are fortunate enough to have any kind of a pension plan (only 25 per cent of people do, according to Statistics Canada) it will likely be the DC type. This puts the onus on you to manage the money to best advantage. Unfortunately, many people have no idea how to do that.

I occasionally lead seminars for defined contribution plan members at which I explain how their plan works and how to use it to their best advantage. Most of the participants have no idea where to start. Many of them simply leave their contributions in a money-market fund or put it into five-year GICs.

In both cases, the returns are well below the level needed to build a healthy retirement fund. For example, one plan I looked at recently was paying less than 2 per cent on a five-year GIC while the one-year return on its money market fund was 0.96 per cent. That’s not good enough.

If you belong to a DC plan, you need to take control. Otherwise, you are going to be sadly disappointed when you discover how little income you’ll receive when you retire. Here are some things you should do.

Know the investment options. A typical DC pension plan will present members with a smorgasbord of investment choices — one I looked at recently had 29 options, including stand-alone funds, portfolio funds and GICs. Understandably, many people are overwhelmed when presented with such a complex menu. It’s no wonder they fall back to the familiar world of GICs.

There are no easy shortcuts. You have to make time to study the choices carefully or use a financial professional to do it for you. Over the years, you’ll be contributing tens of thousands of dollars to the plan — in fact it is probably the largest single investment you will ever make apart from your home.

Decide on asset allocation. Before you commit, decide on your asset allocation: the percentages of cash, bonds and stocks you want to hold in your plan. The less able you are to handle risk, the greater your emphasis on cash and bonds. Younger, more aggressive pension plan members should give greater weighting to equity funds to maximize returns but scale back the risk level as they get older.

Make changes as needed. Your first selections are not locked in. Except for nonredeemable GICs, you should be able to make changes in your pension plan portfolio whenever you wish. So check the performance of your plan, and of the individual holdings, at least twice a year. Replace underachieving funds with better performers — you should receive regular updates from the company that administers the plan.

Also, review the asset allocation at least once a year. If one of the components does exceptionally well, the added value will skew your weightings and you’ll need to rebalance. For example, if you have a target weight of 60 per cent equity funds and stock markets have a great year, as in 2009, you’ll probably find the weighting at year-end has ballooned to 65 per cent. At that point, switch some of the equity funds to bond or money market funds to get back to your original target.

Maximize your contributions. Some defined contribution plans allow you to decide how much of your pay you want to contribute, for example between 4 per cent and 6 per cent. Choosing the highest level will pay off big-time in the long run, especially if the employer is matching your contribution.

Let’s say your income is $50,000 annually and you have 30 years remaining until retirement. Your employer offers the choice of a contribution level of 4 per cent, 5 per cent, or 6 per cent, which the company will match. Assuming an average annual compound rate of return of 6 per cent, if you choose the lowest contribution level the value of the plan after 30 years will be just over $316,000. If you put in 5 per cent of your pay, that increases to $395,000. But if you choose the highest level of 6 per cent, the plan will be worth $474,000 when it comes time to stop work. The end difference between the lowest and highest contribution levels is $158,000 more in retirement savings!

As you can see, there’s a lot of money involved. That’s why it is so important to take the time to properly manage your defined contribution pension plan. It may not be the best plan around but if that’s the type you have, make the most of it.

Also read:

Why $1 million in an RRSP isn’t a pension

Freedom 45: I plan to retire in 13 years

Gordon Pape publishes the Internet Wealth Builder newsletter. His website is www.BuildingWealth.ca

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U.K. lenders should cap mortgages at 90 percent of the property’s value and no more than three-and-a- half times a household’s annual income to prevent another housing bubble, the Institute for Public Policy Research said.

The U.K.’s “addiction to house-price inflation” is damaging the economy and the Conservative-led coalition government should make price stability a priority, the London- based advisory group said in a report today.

“Britain has suffered four housing bubbles in the last 40 years, each of which contributed to major economic and social problems,” Nick Pearce, a director at the IPPR, said in the statement. “We need tougher mortgage-market regulation from the FSA, especially caps on loan-to-value and loan-to-income ratios.” The Financial Services Authority, or FSA, regulates U.K. mortgage providers and other financial-services companies.

House prices tripled in the 10 years through 2006, rising by 12 percent a year, IPPR said. Mortgage lending as a percentage of gross domestic product is 81 percent, compared with 73 percent in the U.S., 49 percent in Canada and 44 percent in Western Europe.

The average loan for a first-time buyer was 3.15 times annual household income in March, IPPR spokesman Richard Darlington said by e-mail. In 2007, when the U.K.’s real estate market peaked, 28 percent of all advanced mortgages had loan-to- income ratios of 3.5 or more. First-time buyers regularly took out mortgages of 100 percent of the property’s value.

‘Build-To-Let’

The ease of obtaining mortgage finance fueled the boom in U.K. residential property prices and helped private landlords to keep institutional investors out of the market. About 83 percent of residential investors owned 10 units or less as of March 31, according to the Association of Residential Letting Agents.

The value of loans taken out by private landlords increased 22 percent last year, Council of Mortgage Lenders data shows, while mortgages obtained by all types of homebuyer fell 5.1 percent, according to the Bank of England.

“We should be encouraging institutional investors to ‘build-to-let,’ while discouraging individual property speculators using buy-to-let mortgages which can artificially inflate our housing market,” Pearce said.

Almost two thirds of non-homeowners believe they have “no prospect” of buying a home, according to a survey published today by Lloyds Banking Group Plc (LLOY)’s mortgage division, Halifax. Seventy-seven percent aspire to own their own home, while nearly half of those surveyed said Britain is becoming more like mainland Europe in terms of the popularity of rented accommodation.

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Sears Holding Corp. moved to a first-quarter loss, dragged down by the absence of a government appliance rebate program and softer sales at its Kmart and Sears stores.

Earlier this month the company led by billionaire Edward Lampert cautioned that it would post a bigger-than-expected loss due mainly to a drop in appliance, clothing and consumer electronic sales.

Sears lost $170 million, or $1.58 per share, compared with net income of $16 million, or 14 cents per share fast cash loans. The adjusted loss was $1.39 per share.

Revenue fell 3 percent to $9.71 billion.

Analysts expected a loss of 99 cents per share on revenue of $9.73 billion.

Sears is also considering a possible move of its headquarters. State and local incentives it receives expire next year.

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Housings starts in the U.S. unexpectedly fell in April as flooding and tornadoes in the South shut down construction sites and homebuilders continued to struggle almost two years into an economic recovery.

Work began on 523,000 houses at an annual pace, down 11 percent from the prior month and less than the 569,000 median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Building permits, a sign of future construction, also decreased.

Falling home values and the prospect of more foreclosures entering the market mean home construction will be slow to gain traction. Unemployment at 9 percent and stagnant wages indicate any recovery in housing may take years to unfold.

“Job growth is essential to household formation and to keep home prices from falling further,” said Eric Green, chief market economist at TD Securities Inc. in New York, who forecast permits at 550,000. “I don’t see home sales doing much of anything” for the foreseeable future.

Another report today showed industrial production unexpectedly stalled in April, reflecting a temporary drop in auto making after supplies of parts were disrupted by the Japanese earthquake and tsunami, according to data from the Federal Reserve. Output was unchanged after a 0.7 percent gain in March, figures from the Federal Reserve showed. Manufacturing fell 0.4 percent, the report showed.

Treasuries Rise

Treasury securities rose after the reports as the slowdown in construction and manufacturing gives Federal Reserve policy makers reason to keep interest rates low. The yield on the benchmark 10-year note, which moves inversely to prices, fell to 3.12 percent at 10:09 a.m. in New York from 3.15 percent late yesterday. The Standard & Poor’s 500 Index fell 0.4 percent to 1,324.51.

Housing starts estimates ranged from 500,000 to 600,000 in the Bloomberg survey of 74 economists.

The Commerce Department revised March’s total to a 585,000 pace, up from a previously estimated 549,000. Starts reached a record low 477,000 pace in April 2009.

Building permits fell 4 percent to a 551,000 annual pace in April. They were projected to rise 0.9 percent to a 590,000 level, according to the survey median.

Construction of single-family houses decreased 5.1 percent to a 394,000 rate in April from the prior month. Work on multifamily homes, such as townhouses and apartments, fell 24 percent to an annual rate of 129,000, the weakest so far this year.

Plunge in South

Starts dropped in two of four regions, led by a 23 percent decrease in the South, the largest area. They fell 4.8 percent in the Northeast and climbed 16 percent in the Midwest and 3.7 percent in the West.

All of the weakness in starts was due to the plunge in the South, reflecting flooding on the Mississippi River that continued into May, Morgan Stanley economists David Greenlaw and Ted Wieseman wrote in a note to clients today. They forecast starts to show “little increase” this year.

Last month was the 10th wettest April since record-keeping began in 1895, with 875 preliminary reports of tornados, a record for any month, according to the National Climatic Data Center. Most wind damage occurred from the southern and central plains to the Atlantic coast.

Confidence among U.S. homebuilders was little changed in May, restrained by a drop in the sales outlook, a report from the National Association of Home Builders/Wells Fargo showed yesterday. The group’s sentiment index held at 16 for a second month. Figures less than 50 mean more respondents view conditions as poor.

Existing-Home Sales

Sales of existing homes, which make up more than 90 percent of the market, rose 2 percent to a 5.2 million annual pace in April, economists surveyed by Bloomberg forecast the National Association of Realtors may report on May 19. Purchases of previously owned houses have been increasing on demand for lower-priced distressed homes.

CoreLogic Inc. in March estimated about 1.8 million homes were delinquent or in foreclosure, a so-called “shadow inventory” set to add to the 3.5 million existing homes already on the market.

Toll Brothers Inc. Chief Executive Officer Douglas Yearley Jr. last week said the April through June home selling season, typically the busiest of the year, has been “disappointing” and that “people are still scared.”

Demand for new houses will remain weak into 2012, said Bill Wheat, chief financial officer of D.R. Horton Inc., who last week also projected a housing recovery will take time to develop.

Jeffrey Mezger, chief executive officer of Los Angeles- based KB Home (KBH), said he expects sales to “bump along for the next 18 months.”

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U.K. house prices rose in April as buyers rushed to beat a sales-tax increase, research company Acadametrics Ltd. and LSL Property Services Plc said.

The average price of a home in England and Wales increased 0.3 percent from March to 223,352 pounds ($363,300), the groups estimated in an e-mailed report in London today. From a year earlier, prices were up 0.9 percent.

The government raised a property transfer tax known as stamp duty for homes costing more than 1 million pounds in April as part of measures to tackle the budget deficit. The property- market recovery may still struggle to sustain momentum this year as banks maintain tight lending standards.

“Rising prices at the top of the market have held up property prices,” said David Newnes, managing director at LSL. “The market remains hampered by tight mortgage lending. The prospect of a rise in unemployment will create growing uncertainty as the year goes on.”

Chancellor of the Exchequer George Osborne increased stamp duty to 5 percent from 4 percent on April 6. Acadametrics said the number of properties above the 1 million-pound threshold sold in the first five days of the month was more than the historical average for the month.

Three of the 10 regions tracked by the groups showed increases in April from March, with the biggest gains in London and the South East, which have a higher proportion of properties above 1 million pounds.

Transactions

The number of transactions fell about 6 percent in April, due to consecutive bank holidays to mark Easter and the wedding of Prince William and Kate Middleton. The total was the second lowest for the month since records began in 1996, the report said. April normally shows a monthly increase of 2.3 percent.

Bank of England data this month showed lenders granted 47,775 home loans in March, less than half the levels seen around the peak of the housing boom at the end of 2006.

A report today by e.surv chartered surveyors showed credit availability may be improving. Homes selling for less than 125,000 pounds accounted for 27 percent of mortgage approvals in April, up from 20 percent a year earlier. Conditions for first- time buyers are improving, e.surv said, as the average loan for the cheapest homes rose to 68 percent of the property’s value from 64 percent.

Other reports on the property market this week have been mixed. The Royal Institution of Chartered Surveyors said May 10 its house-price gauge rose to the highest level in nine months in April. Lloyds Banking Group Plc (LLOY)’s Halifax division said a day earlier prices fell 1.4 percent, the most in seven months.

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Forces loyal to Ivory Coast’s democratically elected president killed hundreds of civilians, raped his rival’s supporters and burned villages during an offensive launched in the country’s west, a human rights group said.

Human Rights Watch, in a report obtained by The Associated Press late Saturday, called on Alassane Ouattara to investigate and prosecute abuses by his forces and those supporting his rival, strongman Laurent Gbagbo.

The group also said that forces loyal to Gbagbo killed more than 100 civilians to retaliate against pro-Ouattara fighters who launched a major offensive advancing toward Abidjan.

Gbagbo is holed up in a bunker in his residence in Abidjan. After a decade in power, he still refuses to step aside even though the United Nations has ruled that he lost the November presidential election to Ouattara.

After four months of diplomacy, Ouattara gave the go-ahead for a military intervention led by fighters from a former rebel group. They swept across the country, advancing hundreds of miles (kilometers) and taking dozens of cities in a matter of days before being held up at the door of Abidjan, Ivory Coast’s biggest and most strategically important city.

“While the international community has been focused on the political stalemate in Abidjan over the presidency, forces on both sides have committed numerous atrocities against civilians, their leaders showing little interest in reining them in,” said Daniel Bekele, Human Rights Watch Africa director.

People interviewed by the group described how pro-Ouattara forces “summarily executed and raped perceived Gbagbo supporters in their homes, as they worked in the fields, as they fled, or as they tried to hide in the bush.”

The report said that many of the abuses occurred from March 6-30, as villages in the west including Toulepleu, Doke, Blolequin, Duekoue and Guiglo fell to pro-Ouattara forces.

The U.N. said peacekeepers and human rights officials discovered about 60 bodies in the western town of Guiglo fast payday loan no faxing. The U.N. human rights agency said another 40 corpses were found lying the street in Blolequin, and many of them had been shot. Fifteen other bodies were found in Duekoue, where violence already has left at least 229 dead in recent weeks.

The rebels were going from house to house, ordering people to come out and breaking down doors in Duekoue’s Carrefour neighborhood, a stronghold of the militia.

The report said that many were targeted for their ethnicity and Ouattara’s Republican forces have killed, raped, and pillaged the predominantly Guere population, who largely supported Gbagbo in the election. Abuses continued through March, culminating in the massacre of hundreds in Douekoue on March 29, the report said.

In recent weeks, a pro-Gbagbo militia had also been targeting Ouattara supporters, refugees told the AP.

On March 28, pro-Gbagbo forces massacred more than 100 people in Blolequin, and killed 10 more northerners and West African immigrants in the town of Guiglo, the group said.

“To understand the tragic events in Ivory Coast, a line cannot be drawn between north and south, or supporters of Gbagbo and Ouattara,” Bekele said. “Unfortunately, there are those on both sides who have shown little regard for the dignity of human life.”

In the report, Human Rights Watch called on Ouattara to “take decisive measures to address serious violations of international law by all forces, prevent further reprisals and acts of collective punishment, and urgently investigate and prosecute all those responsible for abuses.”

More than a million people have fled their homes since the November elections, with some 130,000 cross the border to Liberia.

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South Korea’s producer prices rose at the fastest pace in 27 months, underscoring the likelihood of the central bank raising interest rates today.

Prices increased 6.6 percent in February from a year earlier, the biggest gain since November 2008, after climbing 6.2 percent in January, the Bank of Korea said in a statement in Seoul today. Prices advanced 0.7 percent from January.

A jump in crude oil costs is escalating the danger of inflation in Asia, where central banks are already grappling with price pressures fueled by job and spending gains. In South Korea, the government says it’s now focusing more on price stability than growth, after consumer-price inflation topped a target ceiling of 4 percent for a second month free credit report and score.

“Inflation pressure remains prominent,” Kim Song Yi, an economist at HSBC Holdings Plc in Hong Kong, said before the announcement. “Rates, as we’ve long noted, need to go up.”

The Bank of Korea will this morning boost its benchmark rate by a quarter point to 3 percent, according to all 15 analysts surveyed by Bloomberg News. Last month, the central bank unexpectedly held off from boosting rates.

Consumer prices climbed 4.5 percent from a year earlier in February, the biggest gain in more than two years.

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