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JP Morgan negotiates $4bn payout as it seeks to wipe slate clean
by David Campbell on Sep 25, 2013 at 07:48
JP Morgan is negotiating with US regulators over a $4 billion (£2.5 billion) financial settlement of claims related to mortgage securities trading in the years leading up to the credit crunch.
Californian regulators had been expected to file charges against the bank on Tuesday but negotiations have since been reported to be ongoing, according to the Financial Times.
Following the $920 million fine paid by the bank to regulators on both sides of the Atlantic last week to settle charges related to its ‘London Whale’ trading losses and subsequent cover-up, the payment would remove much of the regulatory shadow hanging over it.
JP Morgan had earlier said that Californian prosecutors had ‘preliminarily concluded that the firm violated certain federal securities laws’, in the way it packaged and sold sub-prime debt before 2007.
The charges stem from deals written by both JP Morgan as well as Bear Stearns and Washington Mutual, which it acquired during the crisis.
Earlier in September the bank had pledged to spend an additional $4 billion on internal controls and devote an additional 5,000 employees to improve compliance and reporting.
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