The Justice Department got a little help making its case against JPMorgan Chase & Co. from a company insider, according to the Wall Street Journal.
The cooperating person has provided the government with emails and other documentation that indicate the nation’s largest bank “vastly overstated” the quality of mortgages backing securities it sold investors during the run-up to the financial meltdown, the Journal reports.
The documentation provided by the insider has given the government leverage to push for an admission of wrongdoing from the bank as part of any settlement.
lJPMorgan and the feds are said to be near to agreeing on a settlement of around $11bn. However, bank officials insist that the lending giant did nothing wrong, and the government’s insistence on an admission of guilt has been a stumbling block in the ongoing talks, the Journal reported.
But the Justice Department says its uncovered documents that indicate the bank was well aware that it was foisting shoddy loans onto unknowing investors, according to the Journal. One such document was an email from a JPMorgan employee to her superiors warning them that they were grossly exaggerating the quality of mortgages being bundled into securities. Despite the employee’s warning, the bank securitized the mortgages, the Journal reported.
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. Despite its legal woes, the bank continues to rake in revenue, posting record earnings last year.