JPMorgan Chase, the country’s biggest bank by assets, has reached a $5.1 billion settlement with the Federal Housing Finance Agency over alleged violations related to mortgage securities it sold in the lead up to the financial crash:
According to the FHFA’s press release on the settlement, JPMorgan will pay $2.74 billion to Freddie Mac and $1.26 billion to Fannie Mae over problematic securities that the bank — along with Bear Stearns and Washington Mutual — sold to the two housing giants in the years leading up to the financial crisis.
“This is a significant step as the government and J. P. Morgan Chase move to address outstanding mortgage-related issues,” FHFA Acting Director Edward J. DeMarco said in the release. “Further, I am pleased that a resolution of single family, whole loan representation and warranty claims could be achieved at the same time. This, too, will have a beneficial impact for taxpayers and the housing finance market.”
In a statement, JPMorgan wrote: “Today’s settlements totaling $5.1 billion are an important step towards a broader resolution of the firm’s MBS-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies.”
Wondering where this leaves JPMorgan in terms of fines and other legal costs overall since the crisis? We have you covered! Check out our handy-dandy infographic:
And here’s the entire FHFA press release on the settlement:
Also on HuffPost:
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London Whale
The bank’s chief investment office gambled on credit derivatives, a href=”http://www.huffingtonpost.com/2012/07/13/jpmorgan-chase-q02-earnings-2012_n_1670629.html” target=”_hplink”losing $5.8 billion/a (so far), and its trading desk may have tried to hide the losses from the home office. The bank says it is being sued by shareholders over the losses and has gotten subpoenas and requests for information from “Congress, the OCC, Federal Reserve, DOJ, SEC, CFTC, UK Financial Services Authority, the State of Massachusetts and other government agencies, including in Japan, Singapore and Germany.”
Milan Swap Deal
The bank has faced a href=”http://www.bloomberg.com/news/2012-07-18/milan-swaps-prosecutor-seeks-ban-on-4-banks-from-government-work.html” target=”_hplink”lawsuits and criminal investigations/a over an interest-rate swap deal it made with the city of Milan, Italy, back in 2005. The bank settled a civil suit, but criminal charges are still pending against the bank and several employees, with hearings in the trial “occurring on a weekly basis since May 2010.”
Enron
The bank and some of its executives are still being sued over the bank’s relationship with the failed, fraud-ridden energy giant, more than a decade after its failure.
Energy Manipulation
Speaking of Enron, the a href=”http://www.huffingtonpost.com/mark-gongloff/jpmorgan-chase-power-market_b_1647131.html” target=”_hplink”Federal Energy Regulatory Commission is investigating/a charges that JPMorgan manipulated power markets in California and the Midwest.
Credit Card Swipe Fees
The bank said in the filing that a href=”http://www.bloomberg.com/news/2012-08-09/jpmorgan-says-credit-card-swipe-case-cost-1-2-billion.html” target=”_hplink”it will pay about $1.2 billion/a to settle charges that it conspired with MasterCard and Visa to rig credit-card swipe fees.
Libor
The bank is being investigated by regulators all over the world for its a href=”http://www.huffingtonpost.com/2012/08/09/jpmorgan-chase-libor-subpoenas_n_1760015.html” target=”_hplink”alleged involvement in manipulating Libor/a, a short-term interest rate that affects borrowing costs for people, businesses and governments all over the world.
Madoff Ponzi Scheme
Several lawsuits have accused the bank of aiding and abetting Bernie Madoff’s Ponzi scheme, the biggest in history. The Madoff bankruptcy trustee and others have also sued the bank to get back some Madoff clients’ money.
MF Global
The bank is under investigation by regulators for its a href=”http://www.google.com/url?sa=trct=jq=esrc=ssource=webcd=1ved=0CFEQFjAAurl=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fhalahtouryalai%2F2012%2F06%2F04%2Fjpmorgans-other-messy-problem-mf-globals-missing-money%2Fei=Ui0lUNP7Eqe96QHP94CABAusg=AFQjCNEJVDksnFTh3KP1uS3u73bLgoSfZQ” target=”_hplink”relationship with the failed brokerage firm MF Global/a. It is also being sued for allegedly aiding and abetting MF Global misuse of customer money.
Mortgage Backed Securities
The bank is being sued by hordes of investors for its bundling and selling of mortgage-backed securities packed with bad mortgage debt before the financial crisis. “There are currently pending and tolled investor claims involving approximately $130 billion of such securities,” the bank says.
Mortgage Foreclosures
The bank was part of the big a href=”http://nationalmortgagesettlement.com/” target=”_hplink”$25 billion settlement/a with the government over mortgage-foreclosure abuses. But there are still several lawsuits and regulatory actions pending against the bank over its foreclosure practices.
Peregrine Financial
The bank didn’t mention this in its regulatory filing, but it is also involved in the failure of the Iowa brokerage firm Peregrine Financial. JPMorgan a href=”http://www.huffingtonpost.com/2012/07/12/pfg-customer-account-jpmorgan-chase_n_1668386.html” target=”_hplink”holds some customer money for the firm/a, and recently a href=”http://www.foxbusiness.com/news/2012/08/06/jp-morgan-objects-to-terms-proposed-by-peregrine-trustee/” target=”_hplink”tussled in court/a with the PFG bankruptcy trustee.
JPMorgan Reaches $5.1 Billion Mortgage Deal With FHFA
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