JPMorgan Reaches $13 Billion Deal with Justice Department - Fox 2 News Headlines

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>>

  • Beach fashion

    Long-sleeved swimsuit is latest beach and pool fashion trend

    Long-sleeved swimsuit is latest beach and pool fashion trend

    Monday, July 21 2014 6:13 PM EDT2014-07-21 22:13:49 GMT
    You have lots of ways to look stylish on the beach, from a bikini to a tankini to a one piece. But the newest trend is long-sleeved swimsuits -- modesty takes precedence over a golden glow. The new beachwear is turning up on sites like ASOS and on luxury sites like Neiman Marcus. There are one piece versions and crop top versions.One of the pioneers of the trend is Dallas-based clothing company Cover.
    You have lots of ways to look stylish on the beach, from a bikini to a tankini to a one piece. But the newest trend is long-sleeved swimsuits -- modesty takes precedence over a golden glow. The new beachwear is turning up on sites like ASOS and on luxury sites like Neiman Marcus. There are one piece versions and crop top versions.One of the pioneers of the trend is Dallas-based clothing company Cover.
  • Wawa to close first store opened 50 years ago

    Wawa to close first store opened 50 years ago

    Monday, July 21 2014 3:01 PM EDT2014-07-21 19:01:43 GMT
    Wawa plans to close the first convenience store opened by the chain in the Philadelphia suburbs a half-century ago.  Susan Bratton, Wawa's regional real estate manager, says the old store is just too small.
    Wawa plans to close the first convenience store opened by the chain in the Philadelphia suburbs a half-century ago.  Susan Bratton, Wawa's regional real estate manager, says the old store is just too small.
  • Cable company customer service rage

    Cable company customer service rage

    Wednesday, July 16 2014 10:58 PM EDT2014-07-17 02:58:18 GMT
    Find someone, anyone, with cable TV who hasn't had at least one miserable experience dealing with that company's customer service people and you've accomplished something we couldn't. But in fairness to the cable companies, whose business model at this point resembles that of a cartel, as customers we don't always handle system outages or the explanations for them in the most mature fashion.
    Find someone, anyone, with cable TV who hasn't had at least one miserable experience dealing with that company's customer service people and you've accomplished something we couldn't. But in fairness to the cable companies, whose business model at this point resembles that of a cartel, as customers we don't always handle system outages or the explanations for them in the most mature fashion.
Powered by WorldNow

WJBK-TV | Fox 2
16550 West Nine Mile Rd.
Southfield, MI 48075

Main Station: (248) 557-2000
Newsroom: (248) 552-5103

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