From The Huffington Post:
JPMorgan Chase said Wednesday it's under federal criminal investigation over its sale of mortgage securities, potentially making the biggest U.S. bank by assets the first large financial institution to face criminal sanctions over securitization practices that contributed to the 2008 financial crisis.
The Justice Department told JPMorgan in May that prosecutors had “preliminarily concluded” that the bank violated civil securities laws related to mortgage securities it packaged and sold from 2005 to 2007, the bank disclosed in a quarterly securities filing. JPMorgan has already been sued over similar practices by Eric Schneiderman, New York attorney general, and has settled similar cases brought by the Securities and Exchange Commission.
...
JPMorgan -- once a darling in Washington -- on Wednesday disclosed a raft of expected enforcement actions that have been broadly mentioned by the bank and its chief executive and chairman, Jamie Dimon, but never before in such detail. Once finalized, the enforcement orders may further damage the bank’s already-battered reputation and lead to heightened scrutiny of its practices.
http://www.huffingtonpost.com/...
Always good to see stories like this. Yesterday, Bank of America was sued by the DoJ, also for mortgage security crimes. From yesterday's New York Times:
The Justice Department sued Bank of America on Tuesday, accusing the bank of defrauding investors by vastly understating the risks of the mortgages backing about $850 million in securities.
The lawsuit adds to the hefty legal burden of the bank, which has been badly battered by mortgage-related losses and litigation since the financial crisis. The great bulk of those troubles stem from the bank’s 2008 acquisition of the subprime lender Countrywide Financial.
Yet the latest litigation centers on Bank of America’s own homegrown mortgage operations. And the loans at issue were represented as prime jumbo mortgages — at the time, 2007, loans of more than $417,000 for a single-unit dwelling — rather than subprime mortgages, which were at the heart of the mortgage crisis.
http://dealbook.nytimes.com/...
Oh please let this be only the beginning.