BANKING GIANT JP MORGAN Chase is to be fined a record $13 billion by the United States government in a bid to settle an investigation into bad mortgage loans the bank sold before the financial crisis hit.
The tentative deal, which was struck on Friday night according to the Wall Street Journal, will not bring to an end a criminal investigation into the bank’s activities which is currently ongoing at a California Court.
The deal will be the largest ever between the US government and a single company and is $2 billion more than JP Morgan’s previous offer of $11 billion.
The US bank, which was widely praised for how it navigated the financial crisis which left many of the biggest players in US banking decimated and forced to merge with other companies, is under investigation for how it sold securities based on home loans, which brought the banking system to the verge of collapse in 2007.
The provisional deal was agreed during a phone call between US Attorney General Eric Holder, his deputy Tony West and JP Morgan’s top lawyer Stephen Cutler, the newspaper said, citing officials familiar with the decision.
The fine comes almost exactly one month after the firm was ordered to pay $920 million (€670m) after it admitted wrongdoing in the London Whale trading controversy.
The firm was charged by the US financial watchdog with misstating financial results and failing to detect and stop its traders from overvaluing investments in order to conceal a multi-billion loss.
- Additional reporting by AFP
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