JPMorgan in settlement talks with SEC


The issue of buyer's remorse has cropped up again in the industry, as banks continue to face investigations of possible wrong-doing committed by banks acquired in the midst of the financial meltdown of 2008.

Barney Frank, an author of Dodd-Frank and a persistent critic of the banking industry, has said that banks should not be prosecuted for the activity of the banks that they were asked to buy by government officials. That sentiment has not stopped government regulators from suing JPMorgan for the sins of Bear Stearns, which it bought for a pittance in 2008.

The Financial Times reports that the bank is now in settlement negotiations with the SEC over allegations that the Bear Stearns failed to properly disclose various risks and failed to "pass on proceeds recovered from loan originators for soured mortgage loans to a trust managing residential mortgage-backed securities."

I fully expect a settlement to be announced soon. The trickier investigation involves New York state AG Eric Schneiderman, who sued the bank recently on similar grounds. There are various other enforcement actions underway as well.

All in all, the issue of whether JPMorgan should be held liable for the sins of Bear Stearns is moot in the eyes of prosecutors. Which means a lot of settlements are on the way. The question is how much money will be involved.

For more:
- here's the article

Related articles:
Frank: JPMorgan shouldn't be prosecuted for Bear Stearns crimes