Econintersect: GEI News called the nearly $1 billion fine paid by JP Morgan last week to the SEC (Securities and Exchange Commission) “Chicken Feed“. Well, the mega-bank may have some more chickens to feed. The New York Time suggests that one federal suit will soon be filed that could seek as much as a $20 billion settlement for MBS (mortgage backed securities) transgressions by the bank. Other suits may be filed for improper commodity trading. And the CFTC (Commodity Futures Trading Commission) may file for additional penalties in the “London Whale” derivates trading affair for which JPM paid $920 million to the SEC and other agencies last week.
Chicken lovers click on picture for larger image.
The biggest suit, in dollar terms, facing JPM is one that is expected to be filed by the Department of Housing and Urban Development which reportedly proposed a settlement of $22 billion for a wide-ranging settlement of mortgage securities violations. JPM rejected that proposal, reportedly stunned by the large dollar amount proposed for settlement.
Federal prosecutors in California and Philadelphia are conducting separate investigations of JPM mortgage business.
Reuters reports that the NCAU (National Credit Union Administration) has filed suit against JP Morgan and eight other banks for compensation to two failed credit unions that suffered losses on MBS that the suit claims were misrepresented.
Bloomberg reports that JP Morgan and 12 other banks are being sued by the same NCUA for damages caused by Libor manipulation.
What is the story about chickens coming home to roost?
Sources:
- JPMorgan’s Legal Hurdles Expected to Multiply (Ben Protess and Jessica Silver-Greenberg, The New York Times, 23 September 2013)
- Regulator sues Morgan Stanley, eight others over faulty securities (Varun Aggarwal, Reuters, 23 September 2013)
- JPMorgan Chase, 12 More Banks Said to Be Sued Over Libor (Andrew Harris, Bloomberg, 24 September 2013)
- JPMorgan Said to Face U.S. Mortgage Securities Charges (Karen Gullo, Bloomberg, 24 December 2013)
- JP Morgan: Chicken Feed (GEI News, 20 September 2013)
