Silver-Greenberg and Protess report: "JPMorgan Chase disclosed on Wednesday that it faced a criminal and civil investigation into whether it sold shoddy mortgage securities to investors in the run-up to the financial crisis, the latest legal threat to the nation's biggest bank."
Is President Obama's federal mortgage task force finally taking action against the big banks? (photo: AP)
JPMorgan Reveals It Faces Civil and Criminal Inquiries
09 August 13
PMorgan Chase disclosed on Wednesday that it faced a criminal and civil investigation into whether it sold shoddy mortgage securities to investors in the run-up to the financial crisis, the latest legal threat to the nation's biggest bank.
JPMorgan acknowledged for the first time the existence of the investigation - one of several mortgage-related problems looming for the bank - in a quarterly regulatory filing. It said that the civil division of the United States attorney's office for the Eastern District of California, which covers a stretch of land that includes Sacramento and Yosemite, has "preliminarily concluded" that JPMorgan flouted federal laws with its sale of subprime mortgage securities from 2005 to 2007. The parallel criminal inquiry, according to one person briefed on the matter, is in a more preliminary stage.
Adding to scrutiny of the bank, federal prosecutors in Philadelphia are examining whether JPMorgan duped investors into buying troubled mortgage securities that later imploded, according to people briefed on the matter, who spoke on the condition of anonymity. The prosecutors are investigating whether JPMorgan churned out the mortgage-backed securities without ensuring that the investments met underwriting standards, the people said.
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