JPMorgan's $13 billion deal hits stumbling blocks: sources
By Aruna Viswanatha and David Henry
(Reuters) - JPMorgan Chase & Co and the U.S. Justice Department have hit snags in working out the final details of their $13 billion settlement over the bank's mortgage bonds, two people familiar with the talks said.
The bank and the government are arguing over whether JPMorgan should be forced to pay for mistakes made by Washington Mutual, the failed mortgage lender it bought during the financial crisis.
JPMorgan is also looking to shut down some criminal inquiries into the bank's mortgage business before the financial crisis, said one of the sources. The other source said there appeared to be a misunderstanding over whether that's what the bank wanted.
Both sources added that whatever disagreements the government and the bank may have, the talks are continuing and have not broken down.
The squabbling shows how hard it will be for JPMorgan to end the many legal problems it faces now.
Earlier this month, JPMorgan and the government entered a preliminary $13 billion settlement to end investigations into whether the bank misled investors when it bundled subprime mortgages into bonds before the financial crisis.
Even if the $13 billion deal is finalized, JPMorgan faces other government probes into everything from bad derivative bets to whether it gave jobs to the children of government-owned company officials in China to secure business there.
The largest U.S. bank said earlier this month it has set aside $23 billion over time to pay for legal issues. Dimon is eager to put the bank's legal issues behind it so he can focus more attention on running the company. He met with U.S. Attorney General Eric Holder in late September in Washington to reach the tentative package deal. Continued...