JPMorgan Chase Could Face Massive Fine

JPMorgan Chase and the Department of Justice have tentatively agreed to a $13 billion civil settlement to resolve several investigations into the bank's mortgage securities business, according to a U.S. official familiar with the negotiations.

Mortgage-backed securities and related derivatives were a key cause of the financial crisis, saddling financial institutions with losses as the housing market cratered. If completed, the settlement would be substantially larger than any law enforcement officials have secured from a single institution in connection with the crisis.

The settlement includes $9 billion in fines and penalties and $4 billion in 'consumer relief,' including home loan modifications, the official said.

A federal criminal investigation based in Sacramento continues, and the deal does not include a non-prosecution agreement that JPMorgan Chase (JPM, Fortune 500) had originally insisted be part of the deal, the official said.

As the criminal case develops, JPMorgan Chase has agreed to assist in an investigation that is pursuing possible charges against individuals, the official told CNN.
JP Morgan Chase declined to comment to CNN.

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The settlement came at the conclusion of talks that included personal negotiations between Attorney General Eric Holder and JPMorgan Chase Chief Jamie Dimon, CNN is told.

“Jamie Dimon, someone who–for those of us who have covered him, he's someone many people thought could be a treasury secretary someday,” CNN Chief Business Correspondent Christine Romans reports. “Now he’s being made to pay for what are the worst, worst offenses of the mortgage-backed security crisis.