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Tags: JPMorgan | Criminal Probe | Mortgages | Bonds

JPMorgan Faces Criminal Probe Over Mortgage Bonds

Wednesday, 07 August 2013 05:56 PM

JPMorgan is facing a federal criminal probe by the U.S. Department of Justice relating to mortgage-backed securities sold by the bank and its subsidiaries in the run-up to the financial crisis.

The New York-based bank said it is responding to parallel investigations being carried out by the Civil and Criminal Division of the U.S. Attorney's office for the Eastern District of California.

JPMorgan said it received notice in May that the office's civil division had concluded that the bank had violated certain federal securities laws in connection with the sale of mortgage-backed securities.

Editor’s Note: Forbes Columnist: ‘Who the Hell Cleared This?’ (See Shocking Video)

The probes relate to securities backed by subprime mortgages and so-called Alt-A mortgages, loans that are less risky than subprime loans, but riskier than prime loans.

JPMorgan made the disclosure in a quarterly regulatory filing late Wednesday. It came a day after the U.S. government accused Bank of America Corp. of civil fraud, saying the company failed to disclose risks and misled investors in its sale of $850 million of mortgage bonds during 2008.

The government says that the bank failed to tell investors that more than 70 percent of the mortgages backing the investment were written by mortgage brokers outside the banks' network.

Bank of America has disputed those allegations.

Shares of JPMorgan Chase & Co. slipped 15 cents to $55.15 in premarket trading Thursday. The stock closed Wednesday at $55.30, up 26 percent since the start of the year.

Editor’s Note: Forbes Columnist: ‘Who the Hell Cleared This?’ (See Shocking Video)

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


FinanceNews
JPMorgan Chase & Co., the biggest U.S. bank by assets, said it is being investigated by civil and criminal divisions of the U.S. Department of Justice over offerings of mortgage-backed securities.
JPMorgan,Criminal Probe,Mortgages,Bonds
258
2013-56-07
Wednesday, 07 August 2013 05:56 PM
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