Chase vs Schneiderman: Why have no top Wall Street executives have been charged criminally for risky acts
Why have no top Wall Street executives have been charged criminally for the risky acts that triggered the crisis. The government also prefers to settle with big companies rather indict them, fearing that criminal charges could unnerve the broader economy.
The government investigations into JPMorgan, which focus on securities the bank sold from 2005 to 2007, raised questions about whether JPMorgan had failed to fully warn investors about the risks of the deals.
One of the largest pieces of the $13 billion deal could come from a settlement with the Federal Housing Finance Agency. The agency sued JPMorgan over loans it had sold to Fannie Mae and Freddie Mac, the government-controlled mortgage finance companies.
The settlement would also resolve a case related to Bear Stearns, the people briefed on the matter said, a lawsuit that has pitted the New York attorney general against JPMorgan.
Eric T. Schneiderman, the New York attorney general, sued JPMorgan last October, saying Bear Stearns and its lending unit, EMC Mortgage, had duped investors who bought mortgage securities assembled by the companies from 2005 through 2007. Through a deal backstopped by the government, JPMorgan bought Bear Stearns in 2008.
Mr. Dimon has called the lawsuit unfair, arguing that JPMorgan should not be penalized for buying Bear Stearns.
Yet JPMorgan's board, faced with regulatory problems, one more vexing than the next, is eager to strike a conciliatory stance. Toward that end, the bank's board approved the payment of about $1 billion in fines to government authorities so it could resolve investigations into the trading loss in London and an inquiry into the bank's credit card products.