Jamie Dimon isn’t signing a big check for nothing.
After JPMorgan Chase agreed to a record $13 billion settlement to end a number of civil probes into its sale of mortgage securities, an ongoing criminal investigation is likely to wind down without charges against the bank or its top executives, according to sources close to the talks.
The nation’s biggest bank agreed to the tentative pact over the weekend even though the Justice Department refused to drop a criminal inquiry into the bank’s sale of mortgage-backed securities leading up to the crisis, which is being handled by federal prosecutors in California.
Despite the lack of assurances, JPMorgan’s legal team, led by Stephen Cutler, has concluded that the more serious criminal probe is heading into the final stages without turning up any evidence that would lead to charges against senior executives or the firm.
The belief is that any charges, if any, would be tied to lower level employees, according to sources.
“The sense is that the bank didn’t break any [criminal] laws,” one source said.
As part of the deal, JPMorgan is expected to cooperate with the continuing criminal probe.
A number of federal and state officials were involved in brokering the sweeping agreement with the bank.
The proposed pact, which could be finalized as early as Thursday, includes $4 billion to settle claims by the Federal Housing Finance Agency, another $4 billion in consumer relief, a $2 billion penalty that will be split among the states and $3 billion to owners of the mortgage bonds.
The number of parties led to tense negotiations not only with the bank but among the various regulators, sources said.
For instance, the Justice Department asked the FHFA to hold off announcing its $4 billion portion of the pact, which was struck days ago, because the DOJ wanted to unveil the sweeping, multibillion-dollar agreement.