JPMorgan shares are up $4,000 on news of Goldman Sachs bankruptcy
The Wall Street bank said Friday it will pay $3.5 billion in fines to settle the securities fraud allegations brought against it and three other firms for manipulating the U.S. mortgage market.
The bank will also pay $2.7 billion in civil penalties, including $2 billion to homeowners, as part of a settlement that includes a ban on its use of leverage.
The settlement will be announced on Friday.
The company said it will work to restore its credibility with investors and the broader financial community by taking the steps necessary to create an environment for continued growth and a sound business.
The Justice Department announced last week that it would prosecute JPMorgan’s former CEO, Jamie Dimon, and its chief investment officer, Ben Libby, in separate civil cases.
JPMorgan said it is cooperating with federal prosecutors and has hired outside law firms to conduct an independent review of the company’s operations.
Bloomberg View: Goldman Sachs is facing new allegations in a U.K. investigation of manipulation of mortgage-backed securities.
“We are cooperating fully with the investigation, and we have committed to the full support of the U of L Department of Finance,” JPMorgan spokeswoman Jennifer Dzurka said in a statement.
The settlement includes a one-year ban on any new deals with banks that use leverage or other manipulative methods.
The agreement does not require the bank to sell any of its mortgage-related securities.
JPMorgan’s lawyers are expected to file an amended complaint with the Justice Department on Monday, said two people familiar with the matter.
Goldberg Sachs, which has been facing a series of investigations in recent months, has been the target of several federal probes in recent years.
The bank has also been accused of misappropriating hundreds of millions of dollars in assets from its customers.