BY AGENCE FRANCE-PRESSE
POSTED ON 10/20/2013 9:08 AM | UPDATED 10/20/2013 9:14 AM
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RECORD FINE. A file photo dated 11 May 2012 showing a sign at a JPMorgan Chase building in New York, New York, USA. EPA/Justin Lane
WASHINGTON DC, USA – US banking giant JPMorgan Chase may pay a record $13 billion fine to the Justice Department to settle investigations into its residential mortgage-backed securities business, The Wall Street Journal reported Saturday, October 19.
But the still tentative deal wouldn't resolve a criminal investigation into the bank's activities being conducted by a court in Sacramento, California, the Journal said.
Citing someone familiar with the decision, the newspaper reported in its online edition that the tentative agreement was hashed out during a phone call Friday with US Attorney General Eric Holder, his deputy Tony West and JPMorgan's top lawyer Stephen Cutler.
The New York Times also reported that the bank was nearing the huge settlement with the Justice Department over its mortgage practices.
US companies tend to avoid paying fines, and often try to make financial settlements without admitting fault.
If the amount is confirmed, it would be the largest ever paid by a US company in this type of settlement with the government. It's also significantly larger than JP Morgan's previous offer of $11 billion.
But the still tentative deal wouldn't resolve a criminal investigation into the bank's activities being conducted by a court in Sacramento, California, the Journal said.
It would, however, settle allegations by the Federal Housing Finance Agency, a mortgage regulator that accuses JPMorgan of having overstated the quality of the mortgages it sold on to the government-sponsored housing finance enterprises Fannie Mae and Freddie Mac.
It would also resolve a separate lawsuit filed by New York's Attorney General Eric Schneiderman.
JPMorgan, the largest US bank by assets, has been under investigation by several US regulatory agencies. It recently agreed to pay more than $1 billion in fines over the "London whale" trading debacle.
The bank just reported its first quarterly loss in nearly 10 years, a net loss of $380 million on revenues of $23.12 billion, due in large part to a $9.15 billion charge for legal expenses.
– Rappler.com
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