An imminent settlement between JPMorgan Chase and the U.S. Department of justice, whereby the financial giant would be paying $13 billion over its activity in mortgages and mortgage backed securities, is being reported by wire and financial news services. The settlement would consist of $9 billion in fines and $4 billion in consumer relief, some of which could be modifications in the terms of some home mortgages. Some of the settlement money would go to Fannie Mae and Freddie Mac, the government sponsored mortgage entities that lost billions of dollars on mortgage backed bonds.
If the settlement goes through it would be the biggest settlement officials have concluded against any firm or institution for actions during and leading up to the 2008-2009 financial crisis.
According to reports by CNN Money on the pending settlement, the deal won't preclude subsequent criminal prosecution by Justice against the firm.
When the financial crisis struck five years ago, JPMorgan Chase and its CEO Jamie Dimon were at first deemed to have been untouched by the crisis, and Dimon was thought of as a stellar CEO running a well managed financial giant. All that changed in May 2012 when JPMorgan losses of billions of dollars of in house trading hit the news headlines. The losses were first reported by the company to be $2 billion, but they quickly began to mount to billions more as the story came to light.
At the time, Dimon said the losses were the result of sloppiness and bad judgement. The criminal case against the company may mean there was more to it than that, maybe even outright fraud.