(See Update below on this afternoon’s announcement of the settlement by JP Morgan)
Does anybody in DC tell the truth anymore?
The settlement between JPMorgan Chase and the Justice Department has been reported at $13 billion, for charges that Chase sold toxic mortgage-backed securities that fueled the financial crisis of 2008.
The reported $13 billion amount is a misrepresentation of the actual figure by the Justice Department and has “nothing to do with mortgage-backed securities,” said former financial regulator Bill Black.
“That’s only one of what are reportedly nine different areas of fraud by JPMorgan that are the subject of this settlement. And that means that the Justice Department is giving up the ability to prosecute, apparently, in eight of these nine areas,” said Black.
Black also says the bank will be able to reduce the fine by approximately $7 billion through payment reductions and tax deduction.
“Roughly it’s a $6 billion deal,” said Black. “That still, of course, is a large number, but compared to how much wealth was extracted by the senior officers and directors, it’s actually not that big a deal, and compared to the losses they caused to the world through these frauds that drove the financial crisis, it’s actually a pittance.”
JPMorgan can still face criminal charges despite the deal with the Justice Department.
Read the full transcript by clicking – http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=10905
UPDATE: Here’s how the JPM $5.1 Billion Settlement is broken down – h/t zerohedge dot com
It’s Friday afternoon, do you know where your fortress-balance-sheet bank’s massive settlement deal with the government is…
- *JPMORGAN TO PAY $5.1 BILLION OVER FHFA MORTGAGE CLAIMS
- *FHFA SAYS JPM TO PAY ABOUT $2.74B TO FREDDIE, $1.26B TO FANNIE
- *JPMORGAN PAYS $1.1B TO RESOLVE REPRESENTATION, WARRANTY CLAIMS
- *FHFA SAYS IT’S SETTLED FOUR OF THE 18 PLS SUITS IT FILED IN ’11
$4 billion of this appears to be part of the $13 billion settlement ‘agreed’ last week; but still leaves the criminal cases from what we can tell… Full statement below…
JPMorgan Chase has reached an agreement to resolve all of its mortgage-backed securities (MBS) litigation with the Federal Housing Finance Agency (FHFA) as conservator for Freddie Mac and Fannie Mae for $4 billion. This settlement resolves the firm’s largest MBS case and relates to approximately $33.8 billion of securities purchased by Fannie Mae and Freddie Mac from J.P. Morgan, Bear Stearns and Washington Mutual. The firm has also simultaneously agreed to resolve Fannie Mae’s and Freddie Mac’s repurchase claims associated with whole loan purchases from 2000 to 2008, for $1.1 billion.
Today’s settlements totaling $5.1 billion are an important step towards a broader resolution of the firm’s MBS-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies.