February 29, 2024

JPMorgan in Talks to Settle S.E.C. Inquiry Into Securities

JPMorgan’s securities unit has been cooperating with agency officials and is “in advanced discussions with the staff concerning a potential resolution of that investigation,” the bank said in a quarterly financial report filed with the S.E.C. on Friday.

JPMorgan did not specify which collateralized debt obligations were the subject of the S.E.C. talks and said there was no assurance that the settlement would be completed.

The C.D.O. investigation gathered momentum last year when the Goldman Sachs Group agreed to pay $550 million and admitted making a “mistake” in its disclosures about a subprime-linked C.D.O.

Separately, JPMorgan, one of the lenders criticized over improper foreclosures on military families’ homes, won approval of a $56 million settlement of claims that it overcharged service members on their mortgages.

Judge Margaret B. Seymour of United States District Court in Columbia, S.C., found that the accord, which provides $27 million in cash to military personnel overcharged on mortgages as well as other benefits, was a fair resolution of suits over the problem loans.

Service members who suffered from the overcharges think the settlement “is phenomenal,” said Jonathon Rowles, a Marine fighter pilot who sued JPMorgan over the handling of his loan.

“They recognized they made mistakes and they took the steps to fix them and compensate people for their damages,” Mr. Rowles said in an interview after the hearing. “I’m pleased with the way it turned out.”

JPMorgan officials acknowledged earlier this year that one of the bank’s units made errors in handling mortgages covered by the Servicemembers Civil Relief Act. That law was enacted in 1942 to shield deployed military personnel from financial stress.

Bank officials “regret the mistakes our firm made on mortgages for members of the military,” Frank J. Bisignano, a JPMorgan executive who leads the home lending unit, said in an e-mailed statement on Friday.

Under the terms of the settlement, Mr. Rowles and an estimated 6,000 other service personnel whose mortgage accounts were mishandled will split the $27 million, according to court filings. That will provide an average payout of $4,500 per soldier, but recoveries will vary based on the service member’s individual damage claims.

The accord also calls for JPMorgan to cut interest rates on all mortgages held by deployed troops to 4 percent for one year, the filing shows.

The lender has agreed to return houses that were improperly foreclosed upon and not yet sold, and to pay fair market value for those already auctioned off, according to the filing. It also will forgive any remaining mortgage debt of military borrowers who were protected by the law and mistakenly foreclosed upon.

Article source: http://feeds.nytimes.com/click.phdo?i=01ea08eacc2440abaa7bc2514de21352

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