DOJ & JPMorgan Finalizing $13 Billion SettlementThe Paralegal Resource
November 20, 2013 — 1,183 views
The biggest bank in the country, JPMorgan Chase & Co, is all set to be the single company to be the highest penalty payer in the history of America. The banks and Department of Justice of U.S have almost finalized the agreement which states that JPMorgan will be paying around $13 billion to the department. The bank has agreed on this settlement amount as it was charged with the accusation of faulty mortgage investments which lead to deep financial crisis in 2008.
Big Win for the Government
This settlement amount will be shared by several other states as well as federal agencies which include the offices of California Atty. Gen. Kamala D. Harris and New York Atty. Gen. Eric Schneiderman. A large part of the settlement amount relates to loans which were packaged and originated by Bear Stearns and Washington Mutual. JPMorgan gobbled up these two troubled banks as the crisis started worsening.
The government has already put up a plan to make best use of the $13 billion which it is to receive. It is planning to use around $4 billion for the relief of all the homeowners who were battered by the foreclosure.
Quite a Few Legal Battles for JPMorgan
JPMorgan has caught up in a lot of legal woes in the last few months. It recently revealed that it had kept aside a whopping $23 billion for its litigation costs. It further added that there can be an increase of an extra $6 billion in its legal tab. However this settlement will allow the bank management to concentrate less on litigation management.
Thomas Gorman, who previously served as an enforcement attorney at Securities and Exchange Commission, said that it is a big step for the bank. Though it may not end all the worries for the company, it will still help the bank in going down the road.
On the other hand this incident has also served as a lesson for all the other major banks operating in the county. Legal experts have redirected that the settlement amount which JPMorgan is being made to pay will help in serving as a template for all other banks which might have been at the government’s radar for the crisis-era actions.
Gorman also said that this is a very big win for the central government. Arthur Wilmarth Jr, who is a professor of law at George Washington University advised the Financial Crisis Inquiry Commission to keep its eyes open on all related matters.