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August 8, 2013

JPMorgan Chase faces twin probes in mortgage securities

“JPMorgan Chase is facing criminal and civil investigations by the Justice Department involving its sales of mortgage-backed securities in 2005 to 2007, the bank said in a regulatory filing Wednesday.

Investigators from Justice’s civil division have ‘preliminarily concluded’ the nation’s largest bank broke the law, JPMorgan said in the filing.

The disclosure is tucked into a single paragraph on page 204 of the bank’s second-quarter financial report with the Securities and Exchange Commission. The investigation is being run by the U.S. Attorney’s Office for the Eastern District of California and covers sales of securities backed by subprime mortgages and limited-disclosure loans made near the peak of the housing bubble, the filing said.”

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“’No one should be surprised that JPMorgan Chase may be charged with wrongful or criminal conduct. They’ve got a record that would make Al Capone look like a neighborhood criminal,’ said Dennis Kelleher, president of financial watchdog group Better Markets, referring to millions the banking giant has paid in recent fines and penalties.

“’The only real question is why it’s taken the feds so long” to pursue a mortgage case against the bank, said Kelleher.”

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Read full USA Today article here

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