Huffpost Business

DOJ Prepares To Sue JPMorgan Over Mortgage Bonds

Posted: Updated:
FILE - In this June 13, 2012 file photo, JPMorgan Chase CEO Jamie Dimon, head of the largest bank in the United States, testifies on Capitol Hill in Washington, before the Senate Banking Committee about how his company recently lost more than $2 billion on risky trades. Throughout 2012, banks faced scrutiny as drama ensued. JPMorgan Chase lost $6 billion in a complex series of trades. (AP Photo/J. Scott Applewhite, File) | AP

(Reuters) - The U.S. Justice Department is preparing to sue JPMorgan Chase & Co over mortgage bonds it sold in the run-up to the financial crisis, a sign the bank's legal troubles are not yet behind it.

A lawsuit could come as early as Tuesday, people familiar with the matter said on Monday.

JPMorgan spokesman Brian Marchiony and Justice Department spokeswoman Adora Andy Jenkins declined to comment.

The bank disclosed in August that federal prosecutors in California were conducting criminal and civil investigations into the bank's mortgage securities.

In those investigations, government lawyers concluded that JPMorgan committed civil violations of securities laws in offering mortgage bonds from 2005 to 2007 that were backed by subprime and other risky residential mortgages.

The expected charges come less than one week after the largest U.S. bank paid $1 billion to resolve investigations into its "London Whale" trading scandal and issues surrounding the wrongful billing of credit-card customers.

It was not immediately clear whether the new charges would be civil, criminal or both.

A source familiar with the cases earlier told Reuters that the California probes involve mortgage bonds offered by JPMorgan itself and not those by companies it bought during the crisis.

(Reporting by Aruna Viswanatha in Washington and Emily Flitter and David Henry in New York; Editing by Gary Hill and Andre Grenon)

Also on HuffPost:

The Totally Unfair And Bitterly Uneven 'Recovery'
Share this
Current Slide

Suggest a correction

Around the Web

BofA set to defend fraud claims in court

A look at JPMorgan's other legal issues

JPMorgan Exposed Social Security Numbers On Mailing About Bank's Privacy ...

Finally, JPMorgan Admits The Bank Broke The Law