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Wednesday, 20 November 2013 09:49

JPMorgan, government finalize $13B settlement of mortgage bonds probe

WASHINGTON (AP) - JPMorgan Chase & Co. has agreed to pay $13 billion in a landmark settlement for activities that prosecutors say were "symptomatic of the recklessness on Wall Street." JPMorgan was among the major banks that sold mortgage-backed securities that plunged in value when the housing market collapsed in 2006 and 2007. Those losses triggered a financial crisis that pushed the economy into the worst recession since the 1930s. As part of the deal, JPMorgan has agreed to provide $4 billion in relief to homeowners affected by the bad loans. The bank also acknowledged that it misled investors about the quality of risky mortgage-backed securities. The $13 billion settlement eclipses the record $4 billion levied on oil giant BP in January over the 2010 offshore oil spill, which was the worst in U.S. history. JPMorgan could still face criminal charges. An investigation is under way by the office of U.S. Attorney Benjamin Wagner in Sacramento, Calif., focused primarily on JPMorgan employees.