JPMorgan enters into $13B settlement with states, federal government

IL Staff
November 20, 2013
Back to TopCommentsE-mailPrintBookmark and Share

JPMorgan has agreed to pay a record $13 billion to settle federal and state civil claims arising out of its packaging, selling, marketing and issuance of residential mortgage-backed securities, the Department of Justice announced Tuesday.

JPMorgan admitted that it made serious misrepresentations to the public about RMBS transactions made prior to Jan. 1, 2009, including that the mortgage loans in various securities complied with underwriting guidelines. In fact, employees knew that the loans were not appropriate for securitization, but allowed the loans to be securitized and then sold without disclosing this information to investors.

These transactions by JPMorgan and other banks contributed to the financial crisis, according to the DOJ.

The settlement is the largest settlement with a single entity in American history. Of the $13 billion, $9 billion will be paid to settle state and federal claims related to RMBS. The remaining $4 billion will go to relief for consumers harmed by the conduct of JPMorgan, Bear Stearns and Washington Mutual, which includes loan modification and efforts to reduce blight.

JPMorgan assumed significant assets of Washington Mutual Bank, which is why it is being held responsible for the conduct of that bank.

U.S. Attorney General Eric Holder and the state attorneys general who worked on the Financial Fraud Enforcement Task Force’s RMBS Working Group lauded the settlement.

“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” said Attorney General Eric Holder. “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 size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over. No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
Subscribe to Indiana Lawyer
  1. So the prosecutor made an error and the defendants get a full remedy. Just one short paragraph to undo the harm of the erroneous prosecution. Wow. Just wow.

  2. Wake up!!!! Lawyers are useless!! it makes no difference in any way to speak about what is important!! Just dont tell your plans to the "SELFRIGHTEOUS ARROGANT JERKS!! WHO THINK THEY ARE BETTER THAN ANOTHER MAN/WOMAN!!!!!!

  3. Looks like you dont understand Democracy, Civilized Society does not cut a thiefs hands off, becouse now he cant steal or write or feed himself or learn !!! You deserve to be over punished, Many men are mistreated hurt in many ways before a breaking point happens! grow up !!!

  4. It was all that kept us from tyranny. So sad that so few among the elite cared enough to guard the sacred trust. Nobody has a more sacred obligation to obey the law than those who make the law. Sophocles No man is above the law and no man is below it; nor do we ask any man's permission when we ask him to obey it. Obedience to the law is demanded as a right; not asked as a favor. Theodore Roosevelt That was the ideal ... here is the Hoosier reality: The King can do no wrong. Legal maxim From the Latin 'Rex non potest peccare'. When the President does it, that means that it is not illegal. Richard Nixon

  5. So men who think they are girls at heart can use the lady's potty? Usually the longer line is for the women's loo, so, the ladies may be the ones to experience temporary gender dysphoria, who knows? Is it ok to joke about his or is that hate? I may need a brainwash too, hey! I may just object to my own comment, later, if I get myself properly "oriented"