News / Economy

    JPMorgan Close to $6 Billion Settlement with Investors

    The JPMorgan Chase & Co. logo is displayed at their headquarters in New York, Oct. 21, 2013.
    The JPMorgan Chase & Co. logo is displayed at their headquarters in New York, Oct. 21, 2013.
    Reuters
    JPMorgan Chase & Co is nearing an agreement worth close to $6 billion with a group of institutional investors to settle claims over shoddy mortgage-backed securities issued in the run-up to the financial crisis, a source familiar with the talks said.
     
    Representatives of JPMorgan and the investors met on Friday to discuss the settlement, though the two sides have not yet agreed to formal terms, the source said.
     
    The potential deal is separate from the preliminary $13 billion settlement JPMorgan has reached with the U.S. government that would resolve a raft of civil actions brought by several enforcement agencies.
     
    The group of more than a dozen bondholders includes BlackRock Inc, Allianz SE's Pacific Investment Management Co and Neuberger Berman Inc, the source said.
     
    Kathy Patrick, a lawyer for the investors group, did not immediately respond to requests for comment. JPMorgan also was not immediately available outside regular U.S. business hours.
     
    Patrick and her Houston-based firm, Gibbs & Bruns, also represent a group of investors that struck an $8.5 billion settlement with Bank of America Corp in 2011 over similar allegations stemming from the bank's Countrywide unit. A New York state judge is weighing whether to approve that deal after American International Group Inc and others objected, arguing that it was too small.
     
    In 2011, the law firm said its investor clients had instructed trustees overseeing $95 billion of securities issued by JPMorgan's affiliates during the housing boom to investigate whether the bonds were backed by ineligible mortgages.
     
    The firm said its clients represented holders of more than 25 percent of the voting rights in the securities, which included bonds from Bear Stearns and Washington Mutual, two firms that JPMorgan took over during the financial crisis.
     
    JPMorgan reported a third-quarter loss earlier this month, the first under CEO Jamie Dimon, after recording a $7.2 billion after-tax expense to add money to its legal reserves in anticipation of settling the U.S. government's mortgage claims.
     
    The company had $23 billion in its legal reserves as of the end of the quarter.
     
    Two sources familiar with the matter told Reuters that JPMorgan's tentative $13 billion settlement with the U.S. government could end up costing the bank closer to $9 billion after taxes, because the majority of the deal was expected to be tax deductible.
     
    The settlement talks were reported earlier by The Financial Times and The Wall Street Journal.

    You May Like

    Candidates' Comments Fly Like New Hampshire Snowflakes

    Four days ahead of the country's first-in-the-nation Republican and Democratic party primary elections, surveys show the parties' contests tightening

    South Korea Says North Korea Moving Closer to Rocket Launch

    In phone call, US President Barack Obama and Chinese President Xi Jinping agree that Pyongyang's move would be 'provocative'

    Australian Commander: IS Changing Tactics

    Head of Australian forces in Middle East talks with VOA about training Iraqi troops, countering evolving Islamic State efforts and defeating extremism

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.

    World Currencies

    EUR
    USD
    0.8926
    JPY
    USD
    116.68
    GBP
    USD
    0.6871
    CAD
    USD
    1.3751
    INR
    USD
    67.653

    Rates may not be current.