JPMorgan Chase will pay $19.7 million to the State of Delaware to settle allegations stemming from conduct credited with causing the greatest economic downturn since the Great Depression.
Tuesday’s settlement is part of a $13 billion global agreement that JPMorgan also reached today with the U.S. Department of Justice and four other states resolving allegations concerning the bundling and sale of mortgages to investors. The investments – bought by pension funds, mutual funds and other investors – were much riskier than advertised. The resulting losses were catastrophic for the economy.
“Our financial system only works when everyone plays by the rules,” Attorney General Beau Biden said. “As a result of our coordinated investigations, we are holding accountable one of the financial institutions that broke the rules and helped cause the economic crisis that brought our nation to its knees. Even as the American people recover from this crisis, we will continue to seek accountability on their behalf.”
Delaware’s $19.7 million will be used to compensate a variety of state entities for their losses on these investments and to fund further efforts to help Delawareans emerge from the financial crisis, strengthen Delaware’s communities and alleviate other harm caused by the financial crisis.
The Delaware settlement resolved a joint investigation by Biden’s Fraud Division and Massachusetts Attorney General Martha Coakley’s Insurance and Financial Services Division that examined JPMorgan’s conduct when issuing mortgage-backed securities.
The federal investigation was led by the U.S. Department of Justice’s Residential Mortgage-Backed Securities Working Group.
