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JPMorgan faces criminal probe over mortgage bonds

By Steve Rothwell

Associated Press

LAST UPDATED: 05:11 a.m. HST, Aug 08, 2013

NEW YORK » JPMorgan is facing a federal criminal probe by the U.S. Department of Justice relating to mortgage-backed securities sold by the bank and its subsidiaries in the run-up to the financial crisis.

The New York-based bank said it is responding to parallel investigations being carried out by the Civil and Criminal Division of the U.S. Attorney's office for the Eastern District of California.

JPMorgan said it received notice in May that the office's civil division had concluded that the bank had violated certain federal securities laws in connection with the sale of mortgage-backed securities. The probes relate to securities backed by subprime mortgages and so-called Alt-A mortgages, loans that are less risky than subprime loans, but riskier than prime loans.

JPMorgan made the disclosure in a quarterly regulatory filing late Wednesday. It came a day after the U.S. government accused Bank of America Corp. of civil fraud, saying the company failed to disclose risks and misled investors in its sale of $850 million of mortgage bonds during 2008. The government says that the bank failed to tell investors that more than 70 percent of the mortgages backing the investment were written by mortgage brokers outside the banks' network.

Bank of America has disputed those allegations.

Shares of JPMorgan Chase & Co. slipped 15 cents to $55.15 in premarket trading Thursday. The stock closed Wednesday at $55.30, up 26 percent since the start of the year.

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serious wrote:
They should go after the rating companies that give these Chris Dodd/Barney Frank mortgage backed securities an A rating
on August 8,2013 | 07:45AM
HD36 wrote:
These bankers should have been arrested and subject to Nuremburge Trals.
on August 8,2013 | 08:12AM
entrkn wrote:
They will buy all the Republicans and grease their way out of this...
on August 8,2013 | 10:17AM
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