US government lets JPMorgan off the hook for mortgage fraud

By Andre Damon and Barry Grey
20 November 2013

On Tuesday, the US Justice Department announced a long-awaited official settlement with JPMorgan Chase & Co., the largest US bank, on an array of charges by state and federal agencies related to the bank’s sale of toxic mortgage-backed securities, which contributed to the 2008 financial crash.

US Attorney General Eric Holder touted the agreement, which includes $9 billion in fines and $4 billion in consumer relief, as a major victory for the public over the banks. “The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over,” said Holder, adding, “No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”

In reality, the settlement falls far short of holding JPMorgan accountable for its fraudulent sale of mortgage-backed assets, which netted the bank tens of billions of dollars in profits while exacerbating the sub-prime mortgage crash that led to over ten million foreclosures in the US and a global economic downturn that thrust many millions more into unemployment and poverty.

Holder himself, in an interview broadcast Tuesday by NBC News, said that, in his opinion, JPMorgan’s actions played a direct role in the biggest financial crisis since the Great Depression. Yet in return for the settlement, the bank is released from a raft of lawsuits by the Justice Department, state attorneys general and three federal agencies.

The settlement’s statement of facts asserts that “employees of JPMorgan… received information that, in certain instances, loans that did not comply with underwriting guidelines were included in the RMBS [residential mortgage-backed securities] sold and marketed to investors; however, JPMorgan… did not disclose this to securitization investors.”

New York State Attorney General Eric Schneiderman, head of the Obama administration’s mortgage fraud task force, said the company “acknowledged it made serious, material misrepresentations to the public—including the investing public—about numerous RMBS transactions.”

https://www.wsws.org/en/articles/2013/11/20/morg-n20.html