You can now read 5 articles in a month for free on Read as much as you want anywhere and anytime for just 99¢.

JPMorgan said to resume settlement talks with US

WASHINGTON — JPMorgan Chase & Co. resumed settlement talks as the government was preparing to sue the bank in federal court, alleging it misrepresented the quality of mortgage-backed securities it sold from 2005 to 2007, a person familiar with the matter said.

The government on Tuesday informed JPMorgan it was ready to file a complaint in Sacramento, Calif., the person said. Shortly after, talks between the bank and Justice Department restarted, said the person, who asked not to be identified.

Continue reading below

JPMorgan wanted to negotiate an accord resolving mortgage-bond investigations by federal and state authorities, including probes by the US attorneys in Sacramento, Philadelphia, and Washington, said another person briefed on the effort. The bank has also tried to settle a $6 billion claim by the Federal Housing Finance Agency and an investigation by New York Attorney General Eric Schneiderman, who sued in October over mortgage bonds packaged by Bear Stearns Cos., which JPMorgan acquired in 2008, according to the person.

The housing agency sued the bank and 17 other lenders two years ago over faulty mortgage bonds. It sought to recoup some of the losses taxpayers covered when the government took over the failing mortgage-finance companies Fannie Mae and Freddie Mac in 2008. They have taken $187.5 billion in federal aid since then.

Spokesmen for JPMorgan, Justice, and the housing agency declined to comment.

Last week, JPMorgan admitted to violating securities laws and agreed to pay $920 million in connection with more than $6.2 billion in trading losses at its London offices. The Securities and Exchange Commission said senior managers at the bank knew in April 2012 that its chief investment office in London was using aggressive valuations that hid losses.

Loading comments...
Want each day's news headlines delivered fresh to your
inbox every morning? Just connect with us
in one of the following ways:
Please enter a valid email will never post anything without asking.
Privacy Policy
Subscriber Log In

You have reached the limit of 5 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of
Marketing image of