“While JP Morgan and the US government are solidifying negotiations on a $13 billion fine for mortgage-related wrongdoing, we’re starting to hear more of a certain meme: Punishing the bank isn’t fair because in buying up failing banks during the financial crisis, it did the government—and the global economy—a huge favor.
“But that’s revisionist history. JP Morgan wasn’t doing anyone a favor; it was seizing a hugely profitable opportunity and was aware of the potential risks at stake.
“This investigation concerns the fraudulent sales of mortgage-backed securities to Fannie Mae and Freddie Mac. The securities were misrepresented as sound, and when the government had to nationalize the two insolvent housing lenders, it cost taxpayers hundreds of billions of dollars. JP Morgan only sold about one-third of the securities in question; the rest were inherited liabilities from two failed financial institutions JP Morgan bought during the financial crisis.”
Read full Quartz article here