Federal prosecutors are expected to charge JP Morgan Chase over the bank’s sales of mortgage-backed securities during the financial crisis.
The investigation arose from the work of an Obama administration task force — which included New York Attorney General Eric Schneiderman and U.S. Attorney Ben Wagner in Sacramento, Calif. — that last year organized prosecutions of fraudulent underwriting activity by U.S. banks at the heart of the crisis. Investigators from Wagner’s office headed up the subsequent probe of alleged fraud.
JPMorgan announced in a regulatory filing last month that investigators found the bank had violated civil laws and were determining whether it also broke criminal laws. The civil charges involved “its subprime and Alt-A residential [MBS] offerings during 2005 to 2007,” the bank said. Bloomberg News first reported the expected charges, citing an anonymous source.
The feds are investigating the bank under the Financial Institutions Reform, Recovery and Enforcement Act, another source told the news service.
Last month, JPMorgan Chase put the 60-story 1 Chase Manhattan Plaza that once served as its headquarters on the market, as previously reported. It’s expected to fetch about $1 billion. [Bloomberg News] — Mark Maurer