The U.S. Justice Department and JPMorgan Chase have struck a tentative $13 billion deal to settle investigations into bad mortgage loans the bank sold to investors in the lead-up to the financial crisis, a person close to the talks said Saturday.
The deal, which would be the largest ever between the US government and a single company, would not release the bank from criminal liability for some of the mortgages it packaged into bonds and sold to investors.
That had been a major sticking point in the discussions, but the government refused to budge and JPMorgan felt it had no choice but to give in, according to a second source. Until recently, the most that JPMorgan was willing to pay was closer to $11bn.
The biggest US bank sidestepped the worst of the financial crisis but now faces more than a dozen investigations globally into everything from alleged bribery in China to a possible role in manipulating benchmark interest rates known as Libor.