JPMorgan Chase & Co. is running up quite the legal tab this year. On Tuesday, that tab grew by $614 million when the company agreed to settle its latest legal woe with the U.S. government.
JPMorgan Chase & Co agreed to pay $614 million to the U.S. government and admitted to defrauding federal agencies, Reuters reports.
As part of the settlement JPMorgan Chase admitted it defrauded federal agencies for over a decade by approving thousands of insured loans that were not eligible for insurance by the Federal Housing Administration and the Department of Veteran Affairs. When the unqualified loans failed both the FHA and VA incurred substantial losses.
The bank is just one of several, including Citigroup Inc and Deutsche Bank AG, that faced similar allegations and reached settlements. Last October, Bank of America Corp was found liable by a jury for fraud over mortgages sold by its Countrywide unit; the Justice Department is seeking $2.1 billion in penalties in that case.
Tuesday’s settlement represents another significant step in JPMorgan Chase & Co’s efforts to put historical mortgage-related issues behind it, bank officials said in a statement.
This isn’t the first settlement for JPMorgan Chase this week. On Monday, the company agreed to pay $1.45 million to settle four-year-old allegations of sexual harassment at a mortgage loan center in Ohio, Reuters reports.
In early January, it was reported the bank was near settling a $2 billion deal relating to Bernie Madoff’s pyramid schemes. In the suit, JPMorgan Chase, Madoff’s bank of choice, should have known something shady was happening with Madoff’s investments and taken action.
Under a civil settlement, which was reached in November, JPMorgan Chase & Co. will pay $13 billion to end government investigations into its marketing and sale of mortgage-backed securities.
While the company has shelled out billions of dollars to settle cases there has always been the assumption that financial institutions and executive are “too big to jail”, but that could change Attorney General Eric Holder said during an MSNBC interview in January.
“There are no institutions that are too big to indict,” Holder said. “There are no individuals who are in such high level positions that they cannot be indicted, criminally investigated.”
In the interview Holder cited the recent cases against JPMorgan Chase & Co. as an example of how prosecutors can pursue criminal charges if warranted. The investigation into JPMorgan Chase continues.
In the past year, bank regulators have faced criticism for not holding the nation’s banks and their executives accountable for their misdeeds. Instead, most banks settle cases rather than head to court, much like JPMorgan Chase.
Making amends without actually saying sorry might be part of the past for large companies if Securities and Exchange Commission Chairwoman Mary Jo White has anything to do with it.
In an interview with The Los Angeles Times, White said the agency has more power than they were perhaps using – and part of that leverage is getting wrongdoers to admit their wrongdoings.