JPMorgan Reaches $13 Billion Deal with Justice Department - FOX 35 News Orlando

JPMorgan Reaches $13 Billion Deal with Justice Department

Posted: Updated:
By FOX NEWS -

JPMorgan Chase and the U.S. Department of Justice have tentatively agreed to a massive $13 billion settlement of certain federal civil probes into alleged misleading and fraudulent sales of mortgage-backed securities by both the bank itself and Bear Stearns, which JPMorgan acquired during the height of the financial crisis, sources close to the matter say.

The settlement as of late Saturday was still preliminary and was reached after weeks of rancorous negotiations, in which bank officials vehemently argued it should be given a break by the federal government since it acquired Bear Stearns and Washington Mutual to help rescue these insolvent companies in 2008.

The nation's biggest bank by assets in this tentative deal has settled just civil probes by the attorney general for California over the bank's sale of its own mortgage-backed securities to Fannie Mae and Freddie Mac from 2005 to 2007, as well as the New York attorney general's probe of Bear Stearns' sale of MBSs to these two companies. The bank still faces criminal probes by the attorney general for California.

The settlement was reached with the U.S. Department of Justice, the California attorney general, the New York attorney-general and the Federal Housing Finance Agency; the Pennsylvania attorney general is still probing Washington Mutual mortgage-backed securities sales to Fannie and Freddie, but that probe has largely been inactive of late, bank sources say.

The bank was still negotiating whether to admit to wrongdoing as part of the deal.

The $13 billion settlement is $2 billion more than the sum previously reported, which initially called for the bank to pay $7 billion in cash and give $4 billion in mortgage relief.

The $13 billion includes $4 billion to settle claims by the Federal Housing Finance Agency, $4 billion in mortgage relief and $5 billion in fines.

The deal was first struck in a phone call late on Friday night between bank chief executive Jamie Dimon, Steve Cutler, the bank’s top counsel, and Eric Holder, U.S. attorney-general, and Tony West, his top deputy, sources say. Mr. Dimon and Mr. Cutler fought to get a deal that voids any potential criminal prosecution, but agreed to a tentative deal that leaves that issue unresolved.

Officials for JPMorgan and the Dept. of Justice declined comment.

In its latest quarterly earnings, JPMorgan booked a $9.2 billion litigation charge related to the probes. JPMorgan also disclosed a huge $23 billion in litigation reserves. It made about $20 billion net profit in all of 2012. JPMorgan Chase has spent $22 billion since 2008 on an estimated 18 federal, state and overseas probes.

  • Your MoneyMore>>

  • Doctors making 'house calls' via app

    Doctors making 'house calls' via app

    Thursday, July 31 2014 10:15 PM EDT2014-08-01 02:15:42 GMT
    Even when it's a simple stomach ache, many of us look to the web for answers. Now, a licensed doctor can diagnose patients through the online service called HealthTap. Patients have been able to type in questions and get answers for free from 62,000 doctors. But now, patients can have live video conferences with doctors for $99 a month, plus $10 for every additional family member.
    Even when it's a simple stomach ache, many of us look to the web for answers. Now, a licensed doctor can diagnose patients through the online service called HealthTap. Patients have been able to type in questions and get answers for free from 62,000 doctors. But now, patients can have live video conferences with doctors for $99 a month, plus $10 for every additional family member.
  • Road-trip vacations that don't break the bank

    Road-trip vacations that don't break the bank

    Thursday, July 31 2014 5:37 PM EDT2014-07-31 21:37:29 GMT
    Last-minute vacations don't need to be a headache or ridiculously expensive, especially if you make it a road trip. Even if you don't have a car, renting one can be an affordable option.Lauren Lyons Cole, a personal finance contributor to TheStreet.com, has some suggestions.
    Last-minute vacations don't need to be a headache or ridiculously expensive, especially if you make it a road trip. Even if you don't have a car, renting one can be an affordable option.Lauren Lyons Cole, a personal finance contributor to TheStreet.com, has some suggestions.
  • OKCupid, Facebook not alone in studying consumers

    OKCupid, Facebook not alone in studying consumers

    Tuesday, July 29 2014 4:51 PM EDT2014-07-29 20:51:44 GMT
    Think you're in control? Think again. This week, OKCupid became the latest company to admit that it has manipulated customer data to see how users of its dating service would react to one another. The New York-based Internet company's revelation follows news earlier this month that Facebook let researchers change news feeds to see how it would affect users' moods.
    Think you're in control? Think again. This week, OKCupid became the latest company to admit that it has manipulated customer data to see how users of its dating service would react to one another. The New York-based Internet company's revelation follows news earlier this month that Facebook let researchers change news feeds to see how it would affect users' moods.
Powered by WorldNow

35 Skyline Drive
Lake Mary, FL 32746

Phone: (407) 644-3535
News Tips: (866) 55-FOX35

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices