JPMorgan to Exit Tax-Lien Business Formerly Part of Bear Stearns
JPMorgan Chase & Co. (JPM) said it will “begin exiting” its tax lien business, Xspand, because the New Jersey-based unit isn’t central to its operations.
Xspand, with headquarters in Whippany, won’t pursue any new business and will continue to service existing tax liens for third-party clients and its portfolio, New York-based JPMorgan said today in a statement.
The unit, also known as Plymouth Park Tax Services LLC, was among companies that received grand-jury subpoenas in 2009 as part of a U.S. Justice Department antitrust probe of bidding at municipal tax-lien auctions in New Jersey, according to an August 2009 prospectus for New York City tax-lien bonds that were serviced by the firm.
“The business wasn’t core to the operations of the investment bank,” Jennifer Zuccarelli, a JPMorgan spokeswoman, said in a telephone interview today. She declined to comment on the investigation.
Antitrust officials investigated whether investors colluded to limit competition on sales to win a higher return, said Vincent Belluscio, executive director of the Tax Collectors & Treasurers Association of New Jersey.
Cities and towns in New Jersey and about 27 other states sell tax debts to investors to raise cash and help fill budget deficits. Buyers of tax liens have the right to collect penalties imposed on delinquent taxpayers by governments, and have first priority to take possession of properties when owners don’t pay taxes.
Xspand, which has about 60 employees, was acquired in JPMorgan’s 2008 takeover of Bear Stearns Cos. The business, founded in 1997, helped governments in 19 states collect more than $4 billion in revenue through the sale of delinquent liens, according to JPMorgan.
To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net.
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.
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