For JPMorgan, ending criminal probe proves impossible for now
By Aruna Viswanatha, Karen Freifeld and David Henry
WASHINGTON/NEW YORK (Reuters) - JPMorgan Chase & Co CEO Jamie Dimon has pleaded with and complained to the U.S. Justice Department but cannot convince the government to end its criminal probe of his bank because prosecutors are not yet certain of their findings, people familiar with the matter said.
Dimon has negotiated a tentative $13 billion deal to settle many of the U.S. investigations into mortgage bonds that JPMorgan - and the banks it bought during the financial crisis - sold to investors.
But the criminal investigation proved to be a sticking point during negotiations, the sources said, and Dimon's inability to win this point underscores the breadth of the problems his bank faces even after it resolves these mortgage suits.
The criminal probe relates to whether JPMorgan misrepresented the quality of the mortgages it was packaging into bonds and selling to investors.
While JPMorgan was not about to admit wrongdoing, Dimon suspected that ending the criminal probe was a long shot and the bank was not interested in holding up all the other settlements to wait for that, one of the sources said. Civil cases require a lower burden of proof than criminal cases, and can often be wrapped up quicker than parallel criminal proceedings.
JPMorgan has set aside a total of $23 billion to pay for legal issues, and faces more than a dozen probes globally.
Prosecutors did not want to end the criminal probe before they were sure of its findings, said several people familiar with the probe and other investigations of the banks. They said the investigation could take another several months.
U.S. President Barack Obama's administration has faced extensive criticism for its failure to prosecute bankers criminally for behavior that led to the financial crisis, which by some estimates has cost the United States economy nearly as much as it earns in a year. Continued...