$11B settlement likely topic for Holder, Dimon
By The Associated Press
Published: Thursday, Sept. 26, 2013, 8:15 p.m.
WASHINGTON — JPMorgan Chase & Co. chief executive Jamie Dimon met on Thursday with Attorney General Eric Holder about an investigation into the company's handling of mortgage-backed securities in the run-up to the recession.
Holder declined to characterize the hourlong discussions, but a government official familiar with ongoing negotiations said an $11 billion national settlement is under review to resolve claims against JPMorgan.
“I did meet with representatives of JPMorgan,” the attorney general said during a news conference being held on another topic.
“We have matters that are under investigation. I expect to be making further announcements in the coming weeks, the coming months,” Holder said. His comment was a general reference to probes the Justice Department has been carrying out for several years involving some of the nation's largest financial institutions, including JPMorgan.
Before and after the meeting with Holder, Dimon declined to answer when asked about the state of the discussions.
Other participants were Steve Cutler, JPMorgan's general counsel, and Rodgin Cohen, a partner in the Sullivan & Cromwell law firm. For the Justice Department, Deputy Attorney General James Cole and Associate Attorney General Tony West also participated.
The Department of Justice is taking the lead on the proposed $11 billion deal, which would include $7 billion in cash and $4 billion in consumer relief, said the government official, who spoke on condition of anonymity because a settlement hasn't been reached and the official wasn't authorized to discuss it publicly.
The mortgage-backed securities lost value after a bubble in the housing market burst and helped spur the financial crisis.
In January 2012, a task force of federal and state law enforcement officials was established to pursue wrongdoing with regard to mortgage securities.
In other cases, the Justice Department last month accused Bank of America Corp. of civil fraud in failing to disclose risks and misleading investors in its sale of $850 million in mortgage bonds in 2008. The Securities and Exchange Commission filed a related lawsuit. The government estimates that investors lost more than $100 million on the deal. Bank of America is disputing the allegations.
Last week, JPMorgan agreed to pay $920 million and admitted that it failed to oversee trading that led to a $6 billion loss last year. That combined amount, in settlements with three U.S. regulators and a British one, is one of the largest fines ever levied against a financial institution.
JPMorgan came through the financial crisis in better shape than most of its rivals, and CEO Dimon had charmed lawmakers and commanded the attention of regulators in Washington.
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