JPMorgan Chase has settled with the DOJ for bundling up and selling toxic mortgages as derivatives to unsuspecting investors. The settlement is $13 billion. The news prompted another round of #AskJPM twitter mega sarcasm.
The Justice Department, along with federal and state partners, today announced a $13 billion settlement with JPMorgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS) by JPMorgan, Bear Stearns and Washington Mutual prior to Jan. 1, 2009.
Of course those who lost their homes in foreclosure during all of this are fundamentally left out in the cold. They won't see a dime. Below is the breakdown of where the settlement money is going and most of it is to investors who purchased bundled up bad mortgages derivatives.
Of the record-breaking $13 billion resolution, $9 billion will be paid to settle federal and state civil claims by various entities related to RMBS. Of that $9 billion, JPMorgan will pay $2 billion as a civil penalty to settle the Justice Department claims under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), $1.4 billion to settle federal and state securities claims by the National Credit Union Administration (NCUA), $515.4 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $4 billion to settle federal and state claims by the Federal Housing Finance Agency (FHFA), $298.9 million to settle claims by the State of California, $19.7 million to settle claims by the State of Delaware, $100 million to settle claims by the State of Illinois, $34.4 million to settle claims by the Commonwealth of Massachusetts, and $613.8 million to settle claims by the State of New York.
JPMorgan will pay out the remaining $4 billion in the form of relief to aid consumers harmed by the unlawful conduct of JPMorgan, Bear Stearns and Washington Mutual. That relief will take various forms, including principal forgiveness, loan modification, targeted originations and efforts to reduce blight. An independent monitor will be appointed to determine whether JPMorgan is satisfying its obligations. If JPMorgan fails to live up to its agreement by Dec. 31, 2017, it must pay liquidated damages in the amount of the shortfall to NeighborWorks America,
Notice how one nonprofit will benefit if JPMorgan Chase falls short and it is not the original homeowners who were harmed. Zerohedge points out JPMorgan Chase holds $550 billion in excess Federal Reserves, which generates 0.25% in interest, so in essence the government just sued itself and got back some of that free money Chase gained thanks to the Federal Reserve.
Chase still has potential criminal charges and the one most interesting is the hiring of high level Chinese officials kids to work at the bank, as in industrial espionage interesting.
While the bank continues to face a criminal investigation into its role as Bernard L. Madoff’s bank and its decision to hire the sons and daughters of some of China’s ruling elite,
The Department of Justice also outlined what JPMorgan Chase must do for consumer relief. It amounts to $2 billion in loans, some anti-blight provisions and giving loans to low income and disaster areas.
JPMorgan Chase until recently is seemingly clueless on what the public thinks of them and other Too Big To Fail Banks. As a PR campaign they opened up twitter hash tag to ask Chase a career advice question. In case you missed getting your 2¢ in, don't worry, many did. The reaction on twitter was an onslaught and a vitriol slam on big finance in general. Here are some choice selections, but you can go to twitter, and see thousands more.
- What's your favorite type of whale?
- Are you really reptilian aliens in human skin?
- Would you rather negotiate with 1 horse-sized Eric Holder, or 100 duck-sized Eric Holders?
- Did you have a specific number of lives you needed to ruin before you considered your business model a success?
- I have Mortgage Fraud, Market Manipulation, Credit Card Abuse, Libor Rigging and Predatory Lending AM I DIVERSIFIED?
Matt Taibbi even held a JPMorgan Chase Haiku contest and reposted the best of the lot. If that isn't enough, here is actor Stacey Keach reading some more choice tweets from #AskJPM.
JPMorgan Chase still gets the last laugh on the twitter snarkpocalypse public relations disaster. The banks, including JPMorgan Chase, received 3.25% of the $1.82 billion Twitter IPO.
While the Department of Justice seems to think $13 billion is a great settlement, a record in history, the problem is banks are bigger and people are poorer. Until new regulations come about and some government actually takes on the global financial system instead of being run by the banks, what we have really is yet another pay to play settlement. All that has happened is the toll for corporations to travel down the super corruption, rip off nations superhighway has become much greater.
nice tax break
NPR is reporting that JP Morgan figures more than half the settlement will be tax deductible..
Sure, any business can write off legal costs and I believe that would include fines and they might even get more tax breaks due to the nature of $2 billion being funneled into "blight".
These mortgages are primarily from WaMu, so hmmm, how many people were foreclosed on and how much profits did they make in the end over toxic mortgages? I'm sure it doesn't even come close to the fine.
I have an image in my head of the CFO's offices inside these large multinationals where they are playing Candyland, moving figures around ledgers until no matter what they do, they win on the balance sheet.
Rule of Law = bullsh*t in USA
Been saying this for a long time now. Banksters and CEOs lobby/own DOJ, Treasury, Fed, Congress, state capitals, IMF, etc. Never lose power ever. They write new laws to break/crush competition and protect own power. Any old laws they break they lobby to be protected from enforcement. See SEC, CFTC, DOJ, etc. CEOs and boards never personally responsible for anything negative, but only for how "great and best and brightest" they are. BOA can forge signatures on thousands of foreclosures, no consequences. Dimon/JP Morgan White Whale illegal trades, Alabama bribery cases, manipulation of oil, aluminum, silver, etc. Mortgage fraud, bribery elsewhere. Oops, let's not forget working with Corzine and MF Global to launder and steal money to destroy farmers and other clients. And on. And on. And on.
Now, has Dimon been charged? Indicted? Handcuffed? Ever seen a day in court? On probation? Parole? Has he ever eaten dogsh*t for lunch in a federal or state pen and had a shank coming his way like small time crooks or regular inmates face? NOPE! Blankein? NOPE! Corzine? NOPE!
But bribe one cop, one legislator, as a small time guy. Fix the price in a single business in a small town. See what happens. You'll be charged within one day and go to court, face a misdemeanor or felony conviction, and be bankrupt due to expenses alone. Then your life will be destroyed.
But hey, you ain't a banksta or CEO of a big corp. or a member of Congress. In other words, George Carlin's small club doesn't apply to you, because you ain't in it. USA 2013 = Living the Plutocrats' Dream = It Sucks for the 99.99% of us that used to believe in hard work, learning, and being honest. But hey, at least we can help fund Dimon's corporate fine if anyone still banks with that douche. Or if he loses $ still (as they have done despite sitting on the FED and receiving free tax money aka being completely inept businessmen that actually lose on free and controlled bets) he can always grab our loot through his govt. puppets. Ah, ain't life grand? Now what do teachers and parents tell kids in this Hell? Why should people start families here? Why look to bust ass in some gig to perpetuate this? Hard work and honesty pay off? What lies.
yeah, but jail time for street art
hell, you can even go to jail for singing at JP Morgan Chase:
Environmental activist Bill Talen, more commonly known as Reverend Billy, could be facing up to a year in prison for organizing a musical protest that brought singing, dancing activists to a Manhattan JP Morgan Chase Bank last month — all dressed as frogs.