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JPMorgan Chase Reaches $13B Settlement with DOJ

In the largest-ever settlement with the U.S. government, banking giant JPMorgan Chase (JPM) officially agreed on Tuesday to shell out $13 billion and admitted making serious misrepresentations over mortgage-backed securities that fueled the financial crisis.
In the largest-ever settlement with the U.S. government, banking giant JPMorgan Chase (JPM) officially agreed on Tuesday to shell out $13 billion and admitted making serious misrepresentations over mortgage-backed securities that fueled the financial crisis.

The formal announcement ends months of careful negotiations between JPMorgan and various government agencies and the 11-figure price tag highlights the intense scrutiny facing the largest U.S. bank by assets.

While a tentative deal was reached in October, the two sides continued to hammer out the fine print in recent weeks. Those final negotiations led to a number of difficult concessions made by JPMorgan, including an agreement not to seek money from a government fund tied to soured mortgages backed by Washington Mutual. JPMorgan acquired WaMu during the height of the financial crisis.

The deal announced on Tuesday resolves federal and state civil claims related to the packaging, marketing, sale and issuance of residential mortgage-backed securities by JPMorgan and WaMu as well as Bear Stearns.

“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” Attorney General Eric Holder said in a statement. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior.

The settlement does not absolve JPMorgan or its employees from facing any possible criminal charges, the Department of Justice said.

For the full story:

http://www.foxbusiness.com/industries/2013/11/19/jpm-settlement/
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