After its tentative $13 billion residential mortgage-backed securities settlement with the US Department of Justice, now JPMorgan Chase & Co (JPM) looks like it could be getting ready to settle yet another MBS fraud case, this time with bondholders, such as Neuberger Berman Group LLC, Allianz SE’s Pacific Investment Management, and BlackRock Inc. (BLK). Investors want at least $5.75 billion dollars.
The group of over a dozen bondholders already had reached a settlement in 2011 in an $8.5 billion mortgage-backed securities case against Bank of America Corp (BAC) over similar allegations. Now, the institutional investors want restitution over bonds that JPMorgan sold—those from the firm itself and also from Washington Mutual (WAMUQ) and Bear Stearns (BSC).
JPMorgan has been settling a lot of securities cases lately. Its $13B RMBS deal with the DOJ resolves a number of matters, including Federal Housing Finance Agency claims for $4 billion. The FHFA believes that J.P. Morgan gave Fannie Mae (FNMA) and Freddie Mac (FMCC) inaccurate information about the quality of the loans they bought from the bank ahead of the decline of the economy in 2008. $5 billion of the proposed RMBS settlement is for penalties and the remaining $4 billion is for the relief of consumers.
As part of the deal a securities case filed by NY AG Eric Schneiderman against the firm over mortgage bonds that were packaged by Bear Stearns would be resolved. Schneiderman says that Bear Stearns misled investors about the quality of the loans backing the securities and was negligent over numerous other matters.
Also, JPMorgan has just agreed to pay the Commodity Futures Trading Commission $100 billion to settle securities fraud claims related to the London Whale debacle that cost the bank over $6 billion. That agreement is in addition to its deals with other US regulators and a regulator in the UK to settle similar allegations for $920 million.
If you are an investor that has sustained losses that you believe was a result of broker negligence, contact our securities law firm today.
REPORT: Another $6 Billion Settlement Looms For JP Morgan, Business Insider, October 23, 2013
JP Morgan may face new $6bn lawsuit, Belfast Telegraph, October 24, 2013
More Blog Posts:
J.P. Morgan’s $13B Residential Mortgage-Backed Securities Deal with the DOJ Stumbles Into Obstacles, Stockbroker Fraud Blog, October 28, 2013
JPMorgan to Pay $920M to Settle London Whale Debacle & $80M Over Credit-Card Practice Allegations, Institutional Investor Securities Blog, September 19, 2013
California AG Files Lawsuit Against JP Morgan Chase Alleging Debt Collection Abuse Over 100,000 Credit Card Cases, Stockbroker Fraud Blog, May 16, 2013