JPMorgan Chase and the Department of Justice have tentatively agreed to a record $13 billion settlement of civil investigations into possible fraudulent sales of mortgage-backed securities before and during the 2008 financial crisis, according to a Bloomberg report.
The settlement would be the largest amount ever paid by a financial firm to the U.S. government but would not release the bank from potential criminal liability on alleged fraudulent sales.
"To not get the waiver from criminal prosecution is not good," Nancy Bush, a bank analyst, told Bloomberg. "What we're looking for in a settlement of this size is certainty from things like the criminal prosecution of a company. The Street wants certainty."
The Bloomberg piece notes that the settlement "would amount to more than half of JPMorgan's record $21.3 billion profit last year."
The settlement comes as some are questioning whether JPMorgan's CEO Jamie Dimon should continue running the company. Allie Jones at The Atlantic Wire reported that on CNBC last month, Alex Pareene, a politics writer at Salon, called for Dimon to be fired.
"I think that any time you're looking at the greatest fine in the history of Wall Street regulation, it's really worth asking should this guy stay in his job. In any other industry — I can’t think of another industry. If you managed a restaurant, and it got the biggest health department fine in the history of restaurants, no one would say, 'Yeah, but the restaurant's making a lot of money. There’s only a little bit of poison in the food,’ ” Pareene said.
But Jones said CNBC anchor Maria Bartiromo defended Dimon, responding, "The company continues to churn out tens of billions of dollars in earnings and hundreds of billions of dollars in revenue. How do you criticize that?"
Bartiromo is not the only one to come to Dimon's defense. Andrew Ross Sorkin at the New York Times' Dealbook wrote last week on those who are defending Dimon from the "bloodlust of pundits" calling for his removal.
“Jamie Dimon is one of the best C.E.O.’s of any company in the world,” Marvin C. Schwartz, a managing director at Neuberger Berman and a longtime investor in JPMorgan, told Sorkin. “It doesn’t mean you can’t have an accident. It’s totally unfair to say he inflicted this upon himself.”