JP Morgan Looks to Pay DOJ $11 Billion to Drop Probes
Alicé Leuchte | October 1, 2013
While US Attorney General Eric Holder has stated he will “hold accountable the people and companies who manipulate our financial markets for their customers’ benefit or for the benefit of the companies,” he has been conducting closed-doors deals with financial institutions who had part in the mortgage crisis.
Last week, Holder met with JP Morgan’s Jamie Dimon to discuss a potential $11 billion settlement to drop probes, and forgo a civil suit. Fox Business reported that JP Morgan was represented by their general counsel (Steve Cutler) as well as Rodgin Cohen, a powerful Wall Street attorney. A potential settlement proposed included “$7 billion cash penalty in addition to $4 billion in relief that the bank would funnel to consumers.”
Forbes took a hardline concerning the deal, calling the settlement “extortion.” Bank Analyst Dick Bove called the bank’s Board of Directors “shameful” for not going before a judge, commenting that:
“If a crime was committed let’s find out who committed it in a court of law. Not behind closed doors. Otherwise, you’re making shareholders pay $11 billion for crimes they themselves didn’t commit.”
Susanne Posel echoed the same sentiment as Bove, but from another perspective in her article for Occupy Corporatism:
…no jail time for JPM executives while only paying a small fraction of the financial windfall JPM and others caused when the housing bubble was created and burst in 2008.
Posel also documents two recent (yet lesser) settlements with Holder, focused on reparations to customers specifically tied to potential discrimination:
Plaza Home Mortgage Inc. (Plaza) of San Diego will pay $3 million to aggrieved borrowers as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of race and national origin.”
Bank of Kenosha (SBK) to pay “$687,000 to African-American and Hispanic wholesale mortgage borrowers” because it was shown that SBK “engaged in a pattern or practice of discrimination on the basis of race and national origin.”
All around, customers on both ends seem to be getting a raw deal. Wrong-doing goes unpunished, and special interests get paid.
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