This might turn out to be good news:
JPMorgan Chase said Wednesday it’s under federal criminal investigation over its sale of mortgage securities, potentially making the biggest U.S. bank by assets the first large financial institution to face criminal sanctions over securitization practices that contributed to the 2008 financial crisis.
The Justice Department told JPMorgan in May that prosecutors had “preliminarily concluded” that the bank violated civil securities laws related to mortgage securities it packaged and sold from 2005 to 2007, the bank disclosed in a quarterly securities filing. JPMorgan has already been sued over similar practices by Eric Schneiderman, New York attorney general, and has settled similar cases brought by the Securities and Exchange Commission.
Other large financial groups also have disclosed in securities filings they’re under U.S. investigation for their dealings in mortgage securities. Criminal investigations are underway against some banks, according to people familiar with the probes, introducing the possibility that criminal charges against a major financial institution for mortgage-related conduct could be filed — a potentially surprising development given prosecutors’ and securities regulators’ past statements suggesting that pre-crisis bad behavior didn’t necessarily equate to criminal wrongdoing.
H/T Seth Price.