Maybe it would be easier if JPMorgan Chase just left a stack of blank checks on the kitchen table and allowed various federal agencies to write in their own amounts. The beleaguered lending giant is in last-minute talks with government prosecutors in an effort to settle a case that was going to be filed Tuesday, according to a Reuters report.
The talks have also expanded to cover several other pending cases, according to MarketWatch, with JPMorgan offering about $3bn to settle the cases, but the federal government insisting on a larger payout.
The latest case deals with JPMorgan’s sale of bonds backed by subprime and other faulty mortgages between 2005 and 2007. The nation’s largest bank disclosed in an August SEC filing that it was under criminal and civil investigation into its mortgage-backed securities. In those cases, the government alleged that JPMorgan had violated securities laws when they offered securities backed by subprime and other deficient mortgages.
JPMorgan is no stranger to legal troubles. Last week the lending giant agreed to shell out $1bn to settle the “London Whale” trading scandal. Between 2008 and 2012, JPMorgan spent $17.7bn on litigation alone, and is currently facing more regulatory enforcement actions than any other U.S. bank, as well as at least seven separate Justice Department investigations.
It’s also facing numerous lawsuits. Last month, the Federal Housing Finance Administration demanded $6bn in order to settle a lawsuit alleging that JPMorgan misrepresented how thoroughly it vetted the mortgages backing some $33bn in securities during the subprime fiasco. Also last month, the bank was ordered to pay $42.5 million to billionaire Leonard Blavatnik in a suit over a tanked investment in mortgage-backed securities.
Despite its legal and regulatory woes, JPMorgan continues to rake in profits, posting record earnings last year, according to the Wall Street Journal.