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JPMorgan Chase under the spotlight again

Sep 24

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24/09/2013 14:02  RssIcon

Company investigated for further malpractice


JPMorgan Chase, who paid close to $1 billion to resolve an array of government investigations last week, are expected to be brought before the courts again, this time over the mis-selling of mortgage securities in the run-up to the financial crisis.

The New York Times revealed today that federal agencies in California and Philadelphia are investigating the company for more wrong doing in the years proceeding the financial crisis.

The NYT reports that the bank is now facing investigations from at least seven US federal agencies, several state regulators and two other countries. The investigations range across the bank. Its mortgage business, debt collection practices and its hiring of the children of well-connected Chinese officials are all under fire.

Last week as part of a global settlement, JP Morgan also settled with four other agencies — the Securities and Exchange Commission (SEC), the U.K. Financial Conduct Authority, the Federal Reserve, and the Office of the Comptroller of the Currency.

JPMorgan will pay a total of approximately $920 million in penalties to settle the actions related to the over valuation of assets and mis-management of traders and the inaccurate reporting of figures to shareholders.

“JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses,” said George S. Canellos, Co-Director of the SEC’s Division of Enforcement.  "While grappling with how to fix its internal control breakdowns, JPMorgan’s senior management broke a cardinal rule of corporate governance and deprived its board of critical information it needed to fully assess the company’s problems and determine whether accurate and reliable information was being disclosed to investors and regulators.”


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