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JP Morgan warned of regulatory risk over Canary Capital

JP Morgan has been warned by its legal advisers that it may be vulnerable to regulatory action for lending $150m (€113m) to Canary Capital, a hedge fund that was fined for market-timing.

Davis Polk & Wardwell said in a letter to JP Morgan that regulators might conclude that the bank should have known Canary Capital was acting improperly by making short-term trades in mutual funds.

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