Legal woes just won't quit for mortgage giant

by Ryan Smith24 Sep 2013

In 1902, John Pierpont Morgan financed the creation of the company that would one day own the RMS Titanic. These days, lawyers for JPMorgan Chase & Co. probably know how the old financier felt on April 15, 1912.

The Department of Justice is getting ready to sue the beleaguered lending giant over mortgage bond sales in the days before the financial meltdown, Reuters reports.

Citing anonymous sources, Reuters reported Monday that a lawsuit could come as early as today. If so, the suit would come less than a week after JPMorgan paid $1bn to settle litigation surrounding its “London Whale” trading scandal.

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, according to Reuters.

If reports of the new lawsuit are true, it marks only the latest of JPMorgan’s legal woes. 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.


Should CFPB have more supervision over credit agencies?