JPMorgan reaches $13 billion settlement with DOJ: reports News
JPMorgan reaches $13 billion settlement with DOJ: reports
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[JURIST] JPMorgan Chase & Co. [corporate website; JURIST news archive] may still face potential criminal liability regardless of a tentative $13 billion deal to settle civil disputes resulting from the US government’s probe into mortgage-bond sales made by the banking giant and its subsidiaries in the run-up to the sub-prime mortgage crisis, according to a Bloomberg report [text] Sunday. The report cites an unnamed source close to the talks between US Attorney General Eric Holder [official website] and JPMorgan. The civil settlement deal is expected to breakdown to “$4 billion in relief for unspecified consumers and $9 billion in payments and fines,” according to Bloomberg. Included in the settlement is a tentative $4 Billion settlement [Reuters report] between JPMorgan and the Federal Housing Finance Agency (FHFA) [official website] regarding accusations that the bank misled the government-sponsored mortgage agencies Fannie Mae and Freddie Mac [official websites].

JPMorgan Chase & Co. has been under intense scrutiny by US government agencies in the aftermath of the sub-prime mortgage crisis. In August the company disclosed [JURIST report] in its quarterly filing with the Securities and Exchange Commission (SEC) [official website] that it is being investigated by both the civil and criminal divisions of the US Attorney’s Office for the Eastern District of California (EDC) [official website] over sales of mortgage-backed securities to investors leading up to the sub-prime mortgage crisis. JPMorgan’s disclosures came one day after the US Department of Justice (DOJ) [official website] filed suit [JURIST report] against Bank of America (BOA) [corporate website], claiming the corporation misled investors about securitized loans worth more than $850 million. In an announcement earlier that week, Attorney General Eric Holder remarked [press release] that the suit against BOA prove that the Financial Fraud Enforcement Task Force [official website] is taking an aggressive approach to uncovering abuses in the residential mortgage-backed securities market.