US banking giant JP Morgan is set for a record 13 billion dollars fine to settle investigations into its mortgage-backed securities, US media reports have said. A tentative deal is believed to have been reached in talks with senior US Justice Department officials.
The fine relates to the sale of securities based on home loans, which led to the near-collapse of the banking system in 2007. If confirmed, it would be the biggest settlement ever paid by an US company.
Last month, JP Morgan was fined almost 1bn in the London Whale scandal, which arose from huge disastrous bets on the financial markets placed by former bank employee Bruno Iksil.
The tentative deal to pay the 13bn fine to the Justice Department was reached during the talks on Friday, between JP Morgan lawyers with US Attorney General Eric Holder and his deputy Tony West, the Wall Street Journal said, citing officials familiar with the decision.
The New York Times also reported that the investment bank was nearing the agreement. Neither the Justice Department nor the bank was available for comment. But the reports said that while the fine would settle all civil claims, the US bank would still face possible federal criminal charges being pursued in California or individual criminal claims.
The 13bn sum is said to include 9bn in fines and a further 4bn in relief for struggling homeowners.
The bank is not alone in facing inquiries into past practice. In August, US government officials filed two lawsuits against Bank of America relating to mortgage-backed securities. Bank of America denied civil fraud in failing to disclose risks and misleading investors.
JP Morgan has found itself overwhelmed by mounting legal troubles lately. Once the darling of Washington and Wall Street, it reported a rare quarterly earnings loss last week, mostly due to legal costs totaling 9.2bn.
The bank lost 380m during the quarter, compared with a profit of 5.7bn in the same period last year. JP Morgan says it has set aside a fund of 23bn to deal with mounting legal costs.
Top Comments
Disclaimer & comment rulesYes, these bastards did more to destabilise the world than ever Hitler did and I wonder how many suicides there were due to them?
Oct 23rd, 2013 - 07:41 pm 0I doubt if they even agree with the verdict but are trying to get back in the saddle. Hope the horse (the customers) kicks them in the bollocks.
Of course, those of us who lost in 6 digits see shit.
Oct 23rd, 2013 - 08:10 pm 02 Captain Poppy
Oct 23rd, 2013 - 09:21 pm 0Well over half way to a million US $ for me.
And am I furious and want to castrate the dealers including the British ones who peddled this crap and not forgetting the Cunt Brown who made matters much worse bailing out the UK banks? Of course I am.
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