JP Morgan set for record $13bn settlement to investors
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Your support makes all the difference.The US banking giant JP Morgan & Co is on the brink of agreeing to a $13bn settlement with investigators to resolve a series of lawsuits and legal cases relating to mortgages sold in the run-up to the world banking crisis in 2007, it was reported last night.
The size of the settlement would make it the largest pay-out of its kind. Jamie Dimon, the bank's chief executive, reportedly spoke with the Attorney General, Eric Holder, on the phone in the final stages of a week of negotiations with the US Justice Department. The bank has been warned, however, that any pact will not release it from possible criminal liability, one of the key sticking points in the negotiations. JP Morgan will be expected to co-operate on further inquiries.
With rising legal costs, Mr Dimon was forced to record the first quarterly loss on his watch last week.
Officials at JP Morgan and the Justice Department declined to comment on the progress of the details, and the new information was released by news wires briefed by an unnamed source.
If the deal is concluded, it will end a civil investigation into mortgage securities sold by the bank in the run-up to the crisis, as well as lawsuits brought by the Federal Housing Finance Agency (FHFA), the National Credit Union Administration, the state of New York and others. The bank had been accused of making false statements and not revealing key facts when selling mortgage bonds to customers between 2005 and 2007.
JP Morgan is seeking a single settlement to resolve all claims from federal and state agencies over its mortgage-related liabilities stemming from the bust in house prices.
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