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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)
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

By Jessica Silver-Greenberg and Ben Protess, The New York Times

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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-1 # indian weaver 2013-08-08 08:27
Too little, too late. Obama will never make up for lost time. This appears to me to be more of Obama's diversionary tactics from his Crimes Against Humanity and the NSA revelations. We won't see any heads roll at JP Morgan, and we won't see any really harmful fines imposed either. More shadows and mirrors courtesy of Obama's lies and cowardice. He's been behind the 8 ball his entire reign and he's still there missing the mark, intentionally it appears to me.
 
 
+3 # HowardMH 2013-08-08 09:15
Don't forget to slap his pinky after you find him guilty and charge him at least a $5 fine.
 
 
+1 # JJMK3 2013-08-08 15:25
Make them do Restitution! "PAY BACK THOSE THAT NEED HELP." THEY CAUSED THIS MESS!
 
 
+1 # dkonstruction 2013-08-09 11:43
This is a company that between 2009-2012 has spent an estimated $16 billion on fines and legal fees or 12% of its net income.

And Jamie Dimon is still considered one of if not the "smartest" bankers of our age? Guess you're considered smart if you figure out how to continue to operate a known-to-be organized criminal enterprise without the gov't shutting you down and seizing your assets. Kind of amazing though that even the shareholders aren't going apeshit at this point.

http://www.ritholtz.com/blog/2013/03/jpm-out-of-control/
 
 
+1 # dkonstruction 2013-08-09 12:06
Also, in the same report in the above link it also says:

"We have intentionally chosen not to detail all of the many private or public actions settled or outstanding (which have driven almost $16 billion in litigation expenses since 2009.)"

Unless i'm reading this wrong, and assuming that the period covered for litigation expenses is the same as for the fines (2009-2012) that would make the total costs (fines and litigation) $24.5 billion or more than 36% of total net income.
 

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