U.S. Pursuing Criminal Charges Against JP Morgan, Other Bank Execs

People stand in the lobby of JPMorgan Chase headquarters in New York. J.P. Morgan Chase (AP Photo/Mark Lennihan, File)

People stand in the lobby of JPMorgan Chase headquarters in New York. J.P. Morgan Chase (AP Photo/Mark Lennihan, File)

Federal prosecutors are pursuing criminal cases against executives from the Royal Bank of Scotland Group (RBS.L) and JPMorgan Chase & Co (JPM.N) for allegedly selling flawed mortgage securities, the Wall Street Journal reported on Tuesday, citing unnamed sources.

People familiar with the probes said officials were trying to determine whether the bankers ignored warnings from associates that they were packing too many weak mortgages into investment offerings and whether they can prove that constituted fraud, the newspaper said. (on.wsj.com/1QKB76u)

If filed, the charges would be among the first pursued against specific employees of the largest Wall Street firms over the housing collapse, the WSJ said.

Prosecutors are scrutinizing a $2.2 billion deal that repackaged home mortgages into bonds in 2007 at RBS and two people who worked on a different residential-mortgage deal at JPMorgan, the Journal said.

JPMorgan, RBS and Department of Justice declined to comment.

JPMorgan said in a filing in November that it was responding to an investigation by the DoJ’s criminal division.

Federal prosecutors in Brooklyn are preparing a civil case against UBS Group AG (UBSG.VX) that could result in substantial penalties, some of the people told the Journal.

UBS received a subpoena from the US Attorney’s Office for the Eastern District of New York in 2014, seeking documents and information related to UBS’s residential mortgage-backed security business from 2005 through 2007, the company said in a filing.

 

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This BBSNews article was syndicated from MintPress News, and written by Reuters. Read the original article here.