While JPMorgan is still in talks with the Department of Justice, talks that could end numerous probes, one employee is said to be cooperating fully with investigations into residential mortgage-backed securities that the company issued prior to the financial crisis. This is reportedly the first cooperator to step forward in the investigation.
The employee claims she alerted her supervisors that they were overstating the value of these securities. According to the Bloomberg, the DOJ has documents that confirm J.P. Morgan was aware of this discrepancy. Currently, the witness has not been identified.
This news comes while JPMorgan is still in talks with the DOJ on a potential settlement that would end investigations from multiple state and federal entities. Whose talks are still in process, and as of yet no details have emerged, the figure being thrown about is $11 billion.
$4 billion of that settlement would be passed onto struggling homeowners and another $7 billion would be paid in fines to the DOJ. No update has been made as to the status of the talks; however, the news that there is a cooperative witness is expected to intensify the DOJ’s push to have JPMorgan give an admission of wrongdoing.
In Sept., J.P. Morgan Chase and Co. paid over a billion dollars in fines for trading and credit card marketing violations. While those cases did not result in the investigations of anyone at the executive level, the scrutiny that the bank has faced over the last year is being met with cries for culpability.
Last week Senator John McCain (R. Ariz.) called JPMorgan CEO Jamie Dimon’s meeting with Attorney General Eric Holder unusual. “Will you seek to hold any top officer, director or key employees within J.P. Morgan personally accountable for the wrongdoing?” McCain asked in a letter to Holder.
It’s hard to feel sorry for a bank, but JPMorgan has certainly taken its far share of lumps in 2013.