In the Headlines: JP Morgan

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In the Headlines: JP Morgan / featured in article by Daniel Bates / featured in article by Daniel Bates

On February 5, JP Morgan Chase Bank agreed to pay $614 million to resolve claims initiated by whistleblower Keith Edwards. Edwards alleged that the bank shirked its duty to report fraudulent application information that was submitted to obtain loans backed by the Federal Housing Administration, Veteran’s Administration and the Department of Housing and Urban Affairs. The bank routinely certified to the government agencies that it was taking steps to identify and report fraudulent information.

When borrowers defaulted on the loans during the housing crisis, the taxpayers were left holding the bag. The money is in addition to an eye popping $13 billion dollar settlement in 2013, the largest fine paid by a single company in U.S. History. The enormous payout resolved additional issues regarding its sales of mortgage backed securities to investors.

Will the bank survive these enormous penalties? Considering JP Morgan reported revenue of nearly a trillion dollars in 2012, and netted over $21 billion, the Bank will probably land on its feet. It is interesting to note that the deal with the Department of Justice does not provide individual executives immunity from criminal prosecution as the bank originally demanded. The Department is putting corporate leaders on notice that if gargantuan fines do not deter fraud, time behind bars may be necessary.


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