Judge approves $280 million JPMorgan settlement

by Ryan Smith06 May 2014
Whoever is writing the checks for JPMorgan Chase better limber up his hand. A US district court judge has granted preliminary approval for the bank to shell out $280 million to settle claims that it misled investors in the purchase of billions of dollars in mortgage-backed securities.

The settlement, which is still subject to final court approval, will be the third-largest in a class action against banks that sold the shoddy securities whose failure helped kick-start the 2008 financial meltdown.

The lawsuit was led by the Public Employees’ Retirement System of Mississippi, according to a Reuters report. The organization filed suit against JPMorgan in 2008 over what it said were false statements and omissions in connection with the sale of $36.8 billion in mortgage bonds issued in 2006 and 2007. The suit accused the lender of ignoring its own standards and guidelines when evaluating the loans backing the securities.

The JPMorgan settlement is only the latest in a string of class-action lawsuits against big banks, Reuters reported. In March, Royal Bank of Scotland agreed to pay $275 million to settle similar claims. In December, Bank of America inked a $500 million deal with investors who claimed they were misled by the bank’s embattled Countrywide unit.


  • by Charles Stidham | 5/6/2014 9:23:59 AM

    Is 2008 the new 1941? Do we get to kick this dead horse over and over and over like it is fresh news? Pearl Harbor was actually important: 2006-2008 was nothing more than simple greed by the likes of Goldman Sachs, Chase, Countrywide, Lehman and Bear Sterns. They hired whiz kids from Ivy League schools to invent synthetic debt that was fueled by 500 fico losers. Let's start talking about less than 1% foreclosure rates, record profits for Fannie and Freddie and a .7% buyback ratio for all mortgages funded by a company like Franklin American Mortgage in 2013. Large mortgage lenders are raking in record profits the right way so please stop acting like the Chase settlement is news.

  • by None | 5/6/2014 9:29:57 AM

    Why is the settlement in favor of investors, why is the homeowners
    Singled our? The Homeowners are the ones that got the shady deals!
    They got foreclosed on, no house, no attorney willing to challenge banks,
    No monetary funds to the Homeowners!
    But the investors get to sue and make Millions,
    While the Homeowners get a slap in the face with a $500.00 check?

  • by Wm Matz | 5/6/2014 5:57:47 PM

    Borrowers are increasingly winning. but that does not help the millions who lost homes. The investors and m.i. companies are going after the big banks and investment banks for the manifold misrepresentations.

    The nuclear explosion will come if the IRS ever follows through on its stated plans to go after the REMIC violations, which trigger 100% penalties. While those would be against the investors, the investors will seek indemnification from the trustees, whose late acceptance of virtually 100% of the securitized mortgages triggered the penalties. The trillions in taxes and penalties would balance the budget. But the indemnification would break most of the major financial institutions. So it will likely be swept under the rug.


Should CFPB have more supervision over credit agencies?