Tuesday, November 19, 2013

JPMorgan Chase to pay Illinois pension systems $100 million under federal settlement

By Jamey Dunn

As part of a $13 billion national settlement, JPMorgan Chase & Co. has agreed to pay millions to Illinois’ public employee pensions systems for not disclosing the risks associated with some investments.

As part of the settlement, JPMorgan Chase admitted that it the misrepresented the quality of mortgage-backed investments it sold. “Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” Attorney General Eric Holder said in a prepared 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. The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over. No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”

Under the deal, the bank will pay $100 million to Illinois pension systems that purchased the investments prior to 2009. “We are still cleaning up the mess that Wall Street made with its reckless investment schemes and fraudulent conduct,” Attorney General Lisa Madigan said in a written statement. “Today’s settlement with Chase will assist Illinois to recover its losses from the dangerous and deceptive securities that put our economy on the path to destruction.” Madigan has been working with President Barack Obama’s Financial Fraud Enforcement Task Force. The group’s investigations spurred this and other settlements from big banks and mortgage servicers. According to a news release from Madigan, JPMorgan Chase will pay $72.4 million to the Illinois Teachers Retirement System (TRS), $16.2 million to the State Universities Retirement System (SURS) and $11.4 million to the Illinois State Board of Investment, which oversees the State Employees’ Retirement System (SRS), General Assembly Retirement System and Judges’ Retirement System (GARS).

The settlement is the largest in U.S. history. It also includes a $4 billion settlement with the Federal Housing Finance Agency and a $4 billion for the U.S. Department of Housing and Urban Development. Some of that money will go toward loans the bank is forgiving or giving more favorable terms to borrowers. Some will go to new low-interest loans to borrowers in areas hit hardest by the housing crisis. The funds will also be used to tear down long-abandoned homes.

JPMorgan Chairman and CEO Jamie Dimon said in a prepared statement: “Today’s settlement covers a very significant portion of legacy mortgage-backed securities-related issues for JPMorgan Chase, as well as Bear Stearns and Washington Mutual.” The company recently announced it has set aside $23 billion to pay for potential settlements.

Justice Department officials say that the settlement does not absolve JPMorgan employees from future civil or criminal charges. “The agreement does not release individuals from civil charges, nor does it release JPMorgan or any individuals from potential criminal prosecution. In addition, as part of the settlement, JPMorgan has pledged to fully cooperate in investigations related to the conduct covered by the agreement,” a statement from the department said.

0 comments:

CTA Bus Status

WMAQ Chicago NBC 5 Video News Feed

There was an error in this gadget

  © Blogger template The Professional Template by Ourblogtemplates.com 2008

Back to TOP