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Whatever Holder Wants, Holder Gets

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And little Jamie, little Holder wants $13 billion.

JPMorgan Chase and the Justice Department finalized a $13 billion settlement on Tuesday, punctuating a long legal battle over the risky mortgage practices that became synonymous with the financial crisis. The civil settlement, which materialized after months of wrangling, resolves an array of state and federal investigations into JPMorgan’s sale of troubled mortgage securities to pension funds and other investors from 2005 through 2008. The government accused the bank of not fully disclosing the risks of buying such securities, which imploded in 2008 and helped plunge the economy to its lowest depths since the Depression...

The $13 billion settlement took shape last month in a series of calls between Mr. Holder and Mr. Dimon. In the interest of expediting a deal, Mr. Dimon backed down on several important issues. While the deal put numerous civil cases to rest, for example, it would not save JPMorgan from any criminal inquiries into its mortgage practices. Under the terms of the deal, the bank would also have to assist prosecutors with an investigation into former employees who helped create the mortgage investments That agreement represented a major concession for JPMorgan, which was seeking to put all of its mortgage-related cases behind it. Mr. Dimon abandoned that demand on one of his many phone calls with Mr. Holder The Justice Department also extracted a larger than expected fine from JPMorgan. The bank’s opening offer was about $3 billion, a fraction of what it paid. At one point, Mr. Dimon asked, “What will it take to get this done?” Mr. Holder informed Mr. Dimon, who at the time was offering $11 billion, that the government would not accept less than $13 billion.

$13 Billion Settlement With JPMorgan Is Announced [Dealbook]