WASHINGTON, Nov. 20 (PNA/Xinhua) — JPMorgan Chase Co. and the U.S. Department of Justice on Tuesday agreed to a whopping 13 billion U. S. dollars settlement that helps resolve legal battle over the banking giant’s practices of misleading investors about toxic mortgage-backed securities.
The deal, the largest civil settlement reached by a single entity and the government in the U.S. history, ends months of wrangling between the U.S. government and the country’s largest bank by assets.
JPMorgan acknowledged it made serious misrepresentations to the public about numerous residential mortgage-backed securities (RMBS) transactions prior to Jan.1, 2009, the Department of Justice said in a statement.
“The conduct JP Morgan has acknowledged — packing risky home loans into securities, then selling them without disclosing their low quality to investors — contributed to the wreckage of the financial crisis,” said U.S. Associate Attorney General Tony West.
As part of the record-breaking settlement, JPMorgan will pay out 9 billion dollars to address federal and state civil claims by various entities related to RMBS. That includes a previously announced 4-billion-dollar deal JPMorgan reached with the Federal Housing Finance Agency last month.
The remaining 4 billion dollars will be paid in the form of relief to underwater homeowners and potential homebuyers harmed by the unlawful conduct of JPMorgan, Bear Stearns and Washington Mutual, which sold toxic mortgage-backed securities to unsuspecting investors in the lead-up to the financial crisis, the department said.
JPMorgan still faces criminal inquiries related to mortgage allegation. “The settlement does not absolve JP Morgan or its employees from facing any possible criminal charges,” the Justice Department said.(PNA/Xinhua)