JPMorgan said to reach tentative deal to pay $13B to resolve civil probes, a record amount
JPMorgan Chase has reportedly reached a tentative deal to pay $13 billion to resolve civil probes regarding the sale of troubled mortgage securities.
The New York Times DealBook blog and the Wall Street Journal (sub. req.) are among the publications reporting on the tentative deal with the U.S. Justice Department, which would be a record penalty if it stands. The stories say there is still disagreement on several issues, including what kind of wrongdoing the bank must acknowledge.
The deal would pay $4 billion to settle claims it misled Fannie Mae and Freddie Mac about the quality of the securities, $4 billion for consumers, and $5 billion in penalties, the Wall Street Journal says. The deal would also resolve a suit filed by the New York attorney general, the Times says.
The case partly stems from mortgage securities sold by rescued entities purchased by JPMorgan in 2008, Bear Stearns and Washington Mutual. U.S. regulators encouraged the purchase but the Securities and Exchange Commission refused to provide assurances that JPMorgan would be held blameless for the entities’ mistakes, the bank’s chief executive, Jamie Dimon, has said.
The pact would not resolve a criminal probe, the stories say. The New York Times DealBook blog has a separate story on the negotiations.
