The financial community is still feeling the effects of Wall Street’s meltdown of 2008. It was recently in the news that JPMorgan Chase has agreed to pay $153.6 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was collapsing.
The bank failed to tell investors that a hedge fund helped select the investment portfolio and then bet that the portfolio would fail, the Securities and Exchange Commission (SEC) said.
The settlement is one of the most significant legal actions targeting Wall Street’s role in the 2008 financial crisis. It comes a year after Goldman Sachs paid $550 million to settle similar charges.
Still, the settlement amounts to less than 1 percent of the bank’s 2010 net income of $17.4 billion — or less than what JPMorgan earns in one week.
As part of the JPMorgan settlement, investors who were harmed will get back all of their money, the SEC said. JPMorgan also agreed to improve the way it reviews and approves mortgage securities transactions.
The bank agreed to settle the charges two weeks after Jamie Dimon, CEO of JPMorgan Chase & Co., complained to Federal Reserve Chairman Ben Bernanke that new financial regulations designed to prevent another financial crisis were too burdensome on banks. Regulators have been investigating a number of major banks’ actions ahead of the financial crisis. More charges are expected. Are the regulators finally learning how to do their job?
Source: JPMorgan to pay $153.6M to settle fraud charges – Yahoo News! (By Daniel Wagner)