JPMorgan to pay record $13B to settle US probes: reports

WASHINGTON - Banking giant JPMorgan Chase reached a tentative agreement to pay a record $13-billion fine to the Justice Department to settle probes into its residential mortgage-backed securities, US media reported Saturday.

Citing sources familiar with the decision, The Wall Street Journal newspaper reported in its online edition that the deal 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.

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 JPMorgan'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. Both sides still disagree over an admission of wrongdoing that would end the probe.

That case could result in charges against individuals, and could increase the fine for JPMorgan Chase.

The New York Times and the Washington Post, which also reported on the tentative agreement, said that JPMorgan Chase CEO Jamie Dimon participated in the talks with Holder.

Once finalized, $4 billion would settle allegations by the Federal Housing Finance Agency, a mortgage regulator, that JPMorgan overstated the quality of the mortgages it sold on to the government-sponsored housing finance enterprises Fannie Mae and Freddie Mac.

Another $4 billion would be destined for consumer relief, and $5 billion would be paid in penalties, the Journal reported.

Although details are still being worked out, the agreement would also resolve a separate lawsuit filed by New York's Attorney General Eric Schneiderman.

US companies tend to avoid paying fines, and often try to make financial settlements without admitting fault.

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 of 2012.

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.

source: interaksyon.com

Citigroup to pay $700 million to settle suit related to 2008 crisis

NEW YORK - US banking giant Citigroup said Monday it will pay $730 million to settle a class-action suit by bondholders related to the 2008 financial crisis.

The suit alleged Citigroup misled buyers of its bonds over its exposure to subprime mortgages and other high-risk securities ahead of and during the crisis, from May 2006 to November 2008.

The plaintiffs had argued that Citigroup misrepresented its exposure to mortgage-related assets, according to Bernstein Litowitz Berger & Grossman, the plaintiffs attorneys.

Citi also understated the loss reserves for its mortgage loans and "falsely stated" that assets held off its balance sheet were of high value, Bernstein Litowitz said.

In a statement, Citi denied the allegations, but said it was settling the case "solely to eliminate the uncertainties, burden, and expense of further protracted litigation."

Citi called the settlement "another significant step toward resolving our exposure to claims arising from the financial crisis."

"We look forward to putting this matter behind us," the bank said.

The plaintiffs in the case included the Arkansas Teacher Retirement Systems and the Louisiana Sheriffs' Pension and Relief Fund.

The settlement must be approved by a US District Court.

source: interaksyon.com