AlterNet - 11/20/13, Steven Rosenfeld
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Wall Street’s latest chapter in corporate accountability is hardly satisfying, even if it is a rare admission of wrongdoing from a major bank. On Tuesday, the Justice Department announced a $13 billion settlement with J.P. Morgan for its rapacious role in the housing market bubble and collapse.
Beyond analyses showing that the government’s supposed largest fine ever might end up “ closer to $2.74 billion,” and that $7 billion of it is tax deductible—tantamount to America’s 138 million taxpayers each giving a $50 bill to Morgan—the nation’s business press is filled with praise for the bank turning a page.
No one should hold their breath waiting for the Justice Department to announce criminal charges against bank executives; even if Attorney General Eric Holder says the case it not closed. Instead, what Americans are left with is an odd legal creature—a so-called “ Statement of Facts”—describing Morgan’s greedy sins.
This declaration is not written in plain English. So here’s AlterNet’s translation of what Morgan said that it did, followed by the relevant legalese. This is as close to a corporate confession of greed and deceit as Americans get today.
1. J.P. Morgan knew it had bad loans from the start.
J.P. Morgan made billions by buying high-interest mortgages and selling them as packages to investors, who expected solid returns. Inside Morgan, its contactors knew that they were buying loans that didn’t even meet the brokers’ standards.
“JPMorgan employees were informed by due diligence vendors that a number of the loans included in at least some of the loan pools that it purchased and subsequently securitized did not comply with the originators’ underwriting guidelines.”
More: alternet.org
