JPMorgan Said to Face U.S. Mortgage Securities Charges

24/09/2013 22:42

Source: Bloomberg


Charges related to JPMorgan Chase & Co.’s sales of mortgage-backed securities could be filed as early as today by U.S. prosecutors in California who have been investigating the bank, a person familiar with the matter said.

The bank said last month in a regulatory filing that the U.S. Attorney’s office in Sacramento had parallel civil and criminal investigations under way. Investigators already have concluded that it broke civil laws and were examining whether criminal laws were broken, according to the filing.

“In May 2013, the firm received a notice from Civil Division stating that it has preliminarily concluded that the firm violated certain federal securities laws in connection with its subprime and Alt-A residential MBS offerings during 2005 to 2007,” the bank said in the filing.

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

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