JPMorgan Seeks Global Settlement with Department of Justice

JPMorgan Chase’s CEO Jaime Dimon met with Attorney General Eric Holder to discuss a settlement over improper mortgage practices by the bank.  JPMorgan’s current offer is the payment of $7 billion in fines and another $4 billion to relieve struggling homeowners.  The government apparently wants more that the proposed $7 billion in fines and penalties.  JPMorgan is reportedly preparing a new and larger offer.  Nevertheless, the size of the fine is not the most important issue separating the two sides.  That issue is whether the settlement will resolve all DOJ criminal and civil investigations.

There are a myriad investigations of the bank by the Justice Department, administrative agencies and states.  JPMorgan is attempting to merge as many of these outstanding investigations as possible into any settlement.  The bank will likely accomplish its goal to some extent.  Nevertheless, it will remain subject to a number of ongoing investigations.

Federal investigators in California have prepared charges against the bank or its officers concerning mortgage securities that the bank sold to investors prior to the housing crash.  The investigation has both civil and criminal components.  Additionally, federal investigators in New York are analyzing allegations that the bank violated Federal Housing Administration rules concerning the that agency’s mortgage insurance program.  Neither of theses investigations is likely to be covered by a settlement.

Additional inquiries include an SEC investigation of whether the bank’s hiring of the children of Chinese officials violated bribery laws such as the Foreign Corrupt Practices Act.  The bank anticipates having incurred legal expenses of $678 million for the second.

For a complete story on the meeting and the investigations facing the bank please see the following article in The New York Times.

About Richard Serafini

Welcome to my blog. I am an attorney and practice in the area of corporate trial work. Areas of particular emphasis are white collar defense, securities litigation, health care litigation, internal investigations, RICO, and financial litigation. I will be posting interesting developments in my areas of interest. I hope that you find this blog helpful and informative.