Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by Law.com, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!

X

J.P. Morgan said to be in settlement talks over mortgage probe

Reports indicate banking giant discussing payout with multiple government entities

Following the threat of a potential suit from the Justice Department in a Calif.-based federal court, J.P. Morgan Chase & Co. is said to be entering settlement talks with the U.S. government over the misrepresentation of mortgage-backed securities that it sold between 2005-2008, the years leading up to the financial crisis.

Originally a suit was expected on Sept. 24, but as of yet no complaint has been entered. This has been taken as a sign that settlement negations are in progress though no official word has been given.

While there is currently no official word on the subject, The New York Times reports that the settlement figures being discussed are between $3 billion and $7 billion and could include some relief to the struggling homeowners. The settlement talks are taking place between a number of government agencies, including the Department of Justice, the Department of Housing and Urban Development and the New York Attorney General’s office, according to media reports.

Accounts of settlement terms are coming from sources that are unwilling to be named, and these sources made it clear that nothing has been finalized and there is still potential for the deals to fall through.

The news does not bode well for J.P. Morgan, which just last week paid over $1 billion in fines related to multiple infractions, disbursing $920 million in settlements over the “London Whale” fiasco and shelled out another $80 million related to issues with its credit card marketing operations. The bank is still facing ongoing investigations for the former.

Additional fines in the billions would undoubtedly be painful for J.P. Morgan, but the alternative could be years of costly litigation against a multitude of federal and state agencies.

Executive Editor

author image

Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.