Courtesy of Mish.
JPMorgan agreed to pay a record $13 billion following a probe of its mortgage operation, Washington Mutual bad loans, and mass waivers on misrepresented products.
Specifically, JPMorgan knowingly bundled toxic loans into packages sold to unsuspecting investors.
But all’s well that ends well.
JPMorgan was assessed a $13 billion fine but apparently did nothing wrong. As an added bonus, $7 billion of that $13 billion settlement is tax deductible.
Please consider JPMorgan $13 Billion Mortgage Deal Seen as Lawsuit Shield
JPMorgan Chase & Co. (JPM)’s record $13 billion deal to end probes into mortgage-bond sales may save the bank billions more because of what the agreement lacked: an explicit admission of wrongdoing.
Employees of JPMorgan and two firms it acquired knew some of the loans included in bonds didn’t meet underwriting standards, a fact not shared with buyers of those securities, the U.S. Justice Department said yesterday in a statement. That doesn’t mean the company misled investors, said Chief Financial Officer Marianne Lake, disputing how some state and federal officials characterized the deal.
No Admission
“We didn’t say that we acknowledge serious misrepresentation of the facts,” Lake said yesterday in a conference call with analysts. “We would characterize potentially the statement of facts differently than others might.”
JPMorgan acknowledged the statement of facts — the settlement’s official narrative of events leading up to the infractions — without admitting violations of law, Lake said. The bank also denied any violations in an accompanying slide show.
Separate agreements with the Federal Deposit Insurance Corp. and National Credit Union Administration, both disclosed yesterday, and an accord last month with the FHFA all contained explicit denials of wrongdoing by JPMorgan.
Attorney General Eric Holder said in a statement. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior.”…
