Los Angeles Considers Cutting Ties With JP Morgan

Posted: Updated:
Print Article

LOS ANGELES (AP) — A Los Angeles councilman proposed Wednesday that the nation's second-largest city consider ending tens of millions of dollars of financial ties with troubled JP Morgan Chase & Co.

A motion introduced by Democrat Gil Cedillo seeks a review of city ties to the bank, as well as an analysis of legal options to end those contracts.

It said a city retirement system holds over $100 million in JP Morgan stock and investments, and the city has a line of credit with the bank.

The motion also suggests disqualifying the bank from doing further business with City Hall.

"We need to review the impacts that the repeated investigations, lawsuits and settlements involving JP Morgan have on our investments and holdings," the motion concluded.

JP Morgan spokeswoman Suzanne Alexander Ryan declined comment.

JP Morgan has entered into a series of legal settlements over its sales of mortgage-backed securities in the years preceding the financial crisis.

As the housing market collapsed between 2006 and 2008, millions of homeowners defaulted on high-risk mortgages, leading to billions of dollars in losses for investors who bought securities created from bundles of mortgages.

Last month, the bank agreed to pay $13 billion in a civil settlement with the Justice Department and state regulators over its sales of the mortgage-linked bonds. It was the largest settlement ever between the Justice Department and a corporation.

In addition, JPMorgan reached a $4.5 billion settlement in November that covered 21 major institutional investors.

The bank said in October that it set aside $9.2 billion in the July-September quarter to cover legal costs.

In a statement, Cedillo said the motion lays out options and welcomes discussion about the possibility of breaking ties with JP Morgan.

It also sends a message to other government entities, he said.

"JP Morgan targeted underserved communities and someone must hold them accountable," Cedillo said. "If we want to make sure that banks like JP Morgan do not engage in such improper conduct in the future, they need to realize there is potential to lose business."

It's expected to take at least several weeks for the City Council to consider the proposal.

___

AP Business Writer Marcy Gordon in Washington contributed to this report.

Also on HuffPost:

Bankrupt Companies That Gave Executives Bonuses
of
Share
Tweet
Advertisement
Share this
close
Current Slide

Suggest a correction

Around the Web

JP Morgan Private Banking Locations near Los Angeles, CA, United ...

JPMorgan Chase & Co. News Coverage - Los Angeles Times

Los Angeles to consider cutting ties with JP Morgan - News

L.A. councilman proposes cutting ties with JPMorgan - Chicago Sun ...

JPMorgan Chase Bank Los Angeles - US Bank Locations

What JPMorgan actually earned in 2013

Los Angeles to Consider Cutting Ties to JP Morgan

Wells Fargo eclipses JPMorgan as most profitable US bank

It Cost JPMorgan $1.5 Billion to Value Its Derivatives Right

The Accounting Wizardry Behind Banks' Strong Earnings