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JP Morgan seeks $4bn settlement to US misselling claims

JP Morgan Chase is in discussions with the US regulator to settle allegations it missold mortgage-backed securities.

The Financial Times reports the bank is looking to settle through a single $4bn (£2.5bn) payment covering all outstanding allegations from state and federal task forces.

The allegations involve a lawsuit from the New York attorney-general along with allegations from US attorney’s offices in California, Pennsylvania and the justice department.

The FT reports prosecutors in California were set to file a lawsuit yesterday before JPM revived talks to reach a settlement.

Last week, the bank was fined a total of £572m by UK and US regulators over the “London Whale” $6.2bn trading losses incurred by the bank.

The penalty was made up of a £137.6m FCA fine, a US Securities and Exchange Commission fine of $200m (£124.4m), while the Office of the Comptroller of the Currency fined the firm $300m, and the Federal Reserve levied a fine of $200m.

In August, it emerged US authorities were demanding more than $6bn (£3.87bn) from JP Morgan Chase amid allegations of misselling securities to government-backed mortgage companies.

In 2011, JP Morgan and 17 other banks were sued by the Federal Housing Finance Agency, a government regulator, for falsely claiming loans backing $33bn of mortgage-backed securities complied with underwriting guidelines.



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