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Alternative Market Briefing

JP Morgan to pay $13bn in settlement with DoJ over mortgages

Wednesday, November 20, 2013

Bailey McCann, Opalesque New York:

The details of a $13bn settlement agreed to by the US government and JP Morgan over mortgage misconduct leading to the financial crisis of 2008 were announced today. The settlement amounts to the largest sum ever paid by a single company to the government and includes a variety of additional non-monetary concessions that JP Morgan will have to make to account for its involvement in the mortgage crisis. The settlement comes on the heels of a number of others involving mortgages, as well as several high profile insider trading cases which have also seen historic settlement figures indicating officials may finally be putting some teeth behind their misconduct charges.

Wall street regulators and the Department of Justice have come under fire from critics who say that failure to take cases to trial and a clear preference for settlements, makes it easier for financial firms to flout the law. If the JP Morgan case is a framework for prosecutions going forward, not only the size of settlement fees but the additional concessions may make financial services firms think twice about violating the rules.

Concessions in the settlement include agreeing to a statement of fact about the misconduct and also bar the company from attempting to recoup settlement fees through the FDIC. According to the DoJ, in the statement of facts JPMorga......................

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