JPMorgan's Dimon meets with U.S. Attorney General Holder

Fri Sep 27, 2013 1:25am EDT
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By David Henry and David Ingram

(Reuters) - JPMorgan Chase & Co CEO Jamie Dimon met with U.S. Attorney General Eric Holder on Thursday, seeking to make sure a possible $11 billion settlement will end the bank's pain from mortgage-securities probes, a source said.

The bank is close to settling many of the probes into how it sold mortgage bonds before the financial crisis, but Dimon fears that as soon as this deal is worked out other investigations will emerge, the person familiar with the matter said.

It is unusual for a CEO of a company to meet with the head of the U.S. Justice Department. But the bank is seeking to tamp down its legal problems as it fends off a spate of probes covering everything from possibly illegal nepotism in China to whether it hid losses from its disastrous "London whale" trades.

On the mortgage front, the Department of Justice in California, New Jersey and Philadelphia has been looking into mortgages that the bank packaged into bonds before the financial crisis. Meanwhile, government-owned home finance giants Fannie Mae and Freddie Mac have been pressuring JPMorgan to buy back mortgage bonds that they said the bank should not have sold them. Those claims and the investigation in California would be the two biggest pieces of any deal, another source said.

After the meeting at the U.S. Justice Department, which lasted about an hour, Holder told reporters that he had met with representatives of JPMorgan but did not mention Dimon by name. He declined to give details of the talks.

Speaking at a news conference on an unrelated topic, the attorney general also said the Justice Department plans to make announcements about financial cases in the coming weeks and months. A source familiar with the matter said a JPMorgan mortgage deal could come within days.

JPMorgan has already paid billions of dollars this year to resolve probes into areas including power market manipulation and failing to supervise employees that lost $6 billion from the London whale trades. Many investors see the heat on the bank as evidence of Dimon's dysfunctional relationship with regulators.

A member of JPMorgan's board of directors said on Thursday at a conference in Chicago that the company is determined to make amends and improve its reputation.   Continued...