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Official: $11B eyed in JPMorgan settlement talks

September 26, 2013
BY MICHAEL VIRTANEN , The Associated Press

ALBANY, N.Y. - An $11 billion national settlement is under discussion to resolve claims over JPMorgan's handling of mortgage-backed securities in the run-up to the recession, said a government official familiar with ongoing negotiations among bank, federal and state officials.

The Justice Department is taking the lead on the settlement, which would include $7 billion in cash and $4 billion in consumer relief, though the deal also would include states with claims against the bank, the official said. The official spoke Wednesday with The Associated Press on condition of anonymity because a settlement hasn't been reached and the person wasn't authorized to discuss it publicly.

The government has continued investigating JPMorgan over mortgage-backed securities, which lost value after a bubble in the housing market burst and helped spur the financial crisis.

The company declined to comment Wednesday.

In January 2012, a task force of federal and state law enforcement officials set up a task force to pursue wrongdoing with regard to mortgage securities.

The Justice Department last month accused Bank of America Corp., the second-largest U.S. bank, of civil fraud in failing to disclose risks and misleading investors in its sale of $850 million of mortgage bonds in 2008. The Securities and Exchange Commission filed a related lawsuit. The government estimates that investors lost more than $100 million on the deal. Bank of America is disputing the allegations.

 
 

 

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