SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Making the big banks pay

Wednesday, Aug 27, 2014

* From last week

Attorney General Lisa Madigan today announced a record $300 million settlement with Bank of America over of the bank’s misconduct regarding risky mortgage-backed securities.

The settlement includes $200 million in relief to fully recover for losses incurred by Illinois’ pension systems and $100 million in consumer relief.

The agreement is part of a national settlement forged by the U.S. Department of Justice and also joined by attorneys general from California, Delaware, Massachusetts, New York and Kentucky. The settlement includes recoveries for RMBS issued by Countrywide and Merrill Lynch, both of which were acquired by Bank of America.

“This settlement resolves the fourth enforcement action I have brought against Bank of America to fight the widespread fraud that was at the root cause of the economic crisis,” said Madigan. “Bank of America, and in particular Countrywide, were major players in virtually every aspect of the market that caused the crisis, from shoddy loan originations and discriminatory lending to African Americans and Latinos to fraudulent marketing of mortgage-backed securities.”

The settlement with Bank of America stems from an investigation by Madigan’s office that revealed that between 2006 and 2008 the bank failed to disclose the true risk of RMBS investments to Illinois’ pension systems and therefore misled the systems when they invested in the RMBS market. […]

Madigan has reached similar agreements with JPMorgan Chase & Company for $100 million to Illinois’ pension systems, and with Citigroup for $44 million to the state’s pension systems and an additional $40 million in consumer relief.

* The Nation has a very long, detailed story about that JPMorgan Chase settlement

In the end, the abject fear of Ben Wagner got Jamie Dimon to cave.

For much of 2013, Dimon, the chairman and chief executive of the formidable JPMorgan Chase & Company, was telling anyone who would listen that it was unfair and unjust for federal and state prosecutors to blame him and his bank for the manufacture and sale of mortgage-backed securities that occurred at Bear Stearns & Company and at Washington Mutual in the years leading up to the financial crisis. When JPMorgan Chase bought those two failing firms in 2008, Dimon argued, he was just doing what Ben Bernanke, Hank Paulson and Timothy Geithner had asked him to do. Why should his bank be held financially accountable for the bad behavior at Bear and WaMu?

It was a clever argument—and wrong. Dimon’s relentless effort to spin his patriotic story soon collided with the fact that Wagner, the US Attorney for the Eastern District of California, had uncovered evidence that JPMorgan itself was guilty of many of the same greedy and irresponsible behaviors. Piles of subpoenaed documents and e-mails revealed that JPMorgan bankers and traders had underwritten billions of dollars’ worth of questionable mortgage-backed securities that Dimon had been telling everyone had originated at Bear Stearns and WaMu. Worse, the bad behavior had occurred on Dimon’s watch.

The likelihood that the Justice Department would file Wagner’s civil complaint last fall—exposing publicly for the first time the litany of wrongdoing at JPMorgan and threatening to push it off the perch that Dimon had so artfully constructed for it over the years—ultimately brought Dimon to the table. On September 26, just weeks after the Justice Department shared a draft copy of Wagner’s complaint with Dimon, the two sides arranged for a summit meeting between Dimon and Attorney General Eric Holder. By mid-November, the bank had agreed to pay $13 billion in a comprehensive settlement of mortgage-related securities claims with various branches of the federal government and a group of states, led by the attorneys general of New York, California, Illinois, Massachusetts and Delaware.

It was the largest financial settlement of all time, and it kept Wagner’s complaint away from the prying eyes of the public. One thing is clear: Dimon’s claim that his own bankers and traders had done nothing wrong in the years leading up to the financial crisis wasn’t true. “The investigators and the lawyers were uncovering very viable evidence,” explains Associate Attorney General Tony West, who headed up the settlement negotiations on behalf of the Justice Department. “I think there was recognition that we had enough evidence there that would support the complaint and would support a robust lawsuit.”

Go read the whole thing. Whew.

- Posted by Rich Miller        


16 Comments
  1. - LincolnLounger - Wednesday, Aug 27, 14 @ 12:07 pm:

    Meanwhile, Dimon is rewarded with more huge pay and bonuses. Remarkable, really.


  2. - Ghost - Wednesday, Aug 27, 14 @ 12:08 pm:

    Rich you have made a huge error here.

    didn’t you know, it is Illinois tax rate, state worker salaries and pensions that caused all the problems in illinois.

    This article mistakenly makes it look like unregulated securities sales and banking practices damaged business and the economy.


  3. - Esteban - Wednesday, Aug 27, 14 @ 12:11 pm:

    Can anyone explain how no one ever seems to be brought up on criminal charges in these deals?


  4. - Ghost - Wednesday, Aug 27, 14 @ 12:19 pm:

    are you asking why jails are filled with minorities for smoking pot but the wealthy white bankers are all walking free and enjoying their multiple houses, and in some cases running for elected office?


  5. - redleg - Wednesday, Aug 27, 14 @ 12:31 pm:

    Nationwide around 42% of home owners are under water with their mortgages.

    This dance with the too big to fails, or something similar to it, will happen again. Not so sure it will be financially survivable the next time.


  6. - wordslinger - Wednesday, Aug 27, 14 @ 12:55 pm:

    Ugh, cost of doing business fines, no matter how big.

    Rob and steal and crash the world economy and you still keep the sweet gig. Bust into someones car and steal their toll change and you’re looking at a forcible felony.


  7. - Aldyth - Wednesday, Aug 27, 14 @ 12:58 pm:

    And nobody goes to jail. Until CEOs start serving jail time, nothing will change. Just factor it into the cost of doing business.


  8. - Nearly Normal - Wednesday, Aug 27, 14 @ 1:02 pm:

    Fat cats stay out of jail while the poorer who can’t afford high-priced attorneys fill them up!


  9. - Da Moat - Wednesday, Aug 27, 14 @ 1:06 pm:

    Criminal charges were brought in New York.


  10. - A guy... - Wednesday, Aug 27, 14 @ 1:08 pm:

    Lisa deserves some credit here. A lot of it, in fact.


  11. - Demoralized - Wednesday, Aug 27, 14 @ 1:34 pm:

    You’re going straight to Republican hell @A guy. lol


  12. - Formerly Known As... - Wednesday, Aug 27, 14 @ 1:35 pm:

    Plenty of fines, while no one does time.


  13. - Pat C - Wednesday, Aug 27, 14 @ 1:45 pm:

    Eric Holder, protecting the upper 1% of the upper 1%…


  14. - paddyrollingstone - Wednesday, Aug 27, 14 @ 1:50 pm:

    Take it away Bob:

    “Steal a little, and they put you in jail. Steal a lot, and they make you king.”

    http://www.youtube.com/watch?v=1XSvsFgvWr0


  15. - A guy... - Wednesday, Aug 27, 14 @ 3:41 pm:

    === Demoralized - Wednesday, Aug 27, 14 @ 1:34 pm:

    You’re going straight to Republican hell @A guy. lol===

    I might be! lol.


  16. - move on - Wednesday, Aug 27, 14 @ 5:13 pm:

    Regardless of what you think of Lisa Madigan’s father, you have to admit that when it comes to consumer protection issues she has done tremendous things for Illinois.


Sorry, comments for this post are now closed.


* Today's quotable
* Question of the day
* The most bizarre impasse ever
* Rauner Family YMCA shuts down program for lack of state funds
* Exelon needs to get to the table
* The DCCC's circular firing squad
* New United Way survey details meltdown
* *** UPDATED x1 - Governor denies report *** Report: Rauner attended Koch donor conference
* Rate AFSCME's new video
* Doomsday timeline
* Tribune favors "right to work" zone for Mistubishi plant
* It's Rauner's world now
* Madigan explains himself
* SUBSCRIBERS ONLY - Supplement to today’s edition
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Good morning!
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * Latest Android distribution a healthy Lollipop at 18.1%
        * Moto Maker option preview for new Moto X Style/Pure leaks
        * 18.1% of Android devices are now running Lollipop
        * Rumored HTC Desire 828w gets TENAA certification in China
        * YouTube updates the look of their web-based video player
        * Carl Pei talks plans for third OnePlus phone, hopefully later this year
        * Alcatel offers special back-to-school phone + watch bundle for students

        * Prospect Thompson called up by White Sox
        * White Sox promote pair of scouting department vets
        * Abreu, Eaton named AL Co-Players of the Week
        * Trayce Thompson a rare high school success story for White Sox
        * Prospect Thompson called up by White Sox
        * Podcast: Same Direction
        * Terrerobytes: Chris Sale's fastball has a mind of its own

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        August 2015
        July 2015
        June 2015
        May 2015
        April 2015
        March 2015
        February 2015
        January 2015
        December 2014
        November 2014
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Rauner: Illinois to review new federal power plant limits
        * Chicago-based nonprofit gets $7.2M from Chase settlement
        * Rauner declares 23 counties disaster areas, seeks FEMA help
        * Survey: 1/3 of Illinois human service agencies making cuts
        * 7 northern Illinois counties looking to form alliance
        * Rauner signs bill regarding student concussions
        * Health care company to hire 300 people for Illinois office
        * Southern Illinois cities embrace golf carts on public roads
        * 2-year-old boy drowns at northern Illinois campground
        * Ex-Illini players' attorney says report doesn't surprise him

        * Rauner declares 23 counties disaster areas, seeks FEMA help
        * Survey: 1/3 of Illinois human service agencies making cuts
        * Rauner signs bill regarding student concussions
        * Lawmakers evade pressure to buckle on budget
        * Statehouse Insider: What took them so long?
        * Executive Mansion to get new roof; fundraising event coming up
        * Blagojevich attorney says he'll ask full court for rehearing
        * Executive Mansion to get roof replaced for $493K
        * Illinois' health insurance co-op among those struggling
        * Court ruling helps some child care providers amid ongoing state budget impasse

        * Allstate's quarterly profit slides 45% as auto losses rise
        * Allstate’s quarterly profit slides 45% as auto losses rise
        * Mesirow to close bankruptcy consulting business
        * Mayer Brown sued over $1.5 billion error
        * U of I named biggest party school


          * Man dies days after being shot in University Village
          * Trial begins in federal court over alleged framing by FBI agent
          * Aaron Schock's PAC refunded money to 3 Illinois businessmen
          * Psychiatrists differ on mental state of man charged in officer's killing
          * Chicago to net $16 million for Malcolm X site
          * Official: Chicago charter schools get full CPS payment, not just 15 percent
          * Chicago reports 34 arrested, 238 sent to hospitals during Lollapalooza
          * DNA evidence reopens Grundy County cold case for teen who vanished in 2000
          * Riverside bank employee stops unoccupied car moving on sidewalk
          * Man gets 55 years for Bronzeville murder


          * Rauner declares 23 counties disaster areas, seeks FEMA help
          * Survey: 1/3 of Illinois human service agencies making cuts
          * Rauner signs bill regarding student concussions
          * Dick Haas: Critical to strengthen Illinois' public record
          * Lawmakers evade pressure to buckle on budget
          * Statehouse Insider: What took them so long?
          * Statehouse Insider: What took them so long?
          * Angie Muhs: Diverse views and healthy dialogue
          * Our Opinion: Don't sit on the sidelines of government
          * House Speaker Michael Madigan: Solving Illinois' crisis requires coming together in moderation


          * The News-Gazette Sports Page 08-03-15
          * West Nile surfaces in Champaign County
          * UI chancellor, AD talk women's basketball report
          * Updated: Trooper charged with felony in Steak 'n Shake incident
          * Taffies closing Country Fair location on Tuesday
          * Updated: Former players' attorney: $10 million lawsuit against UI, coaches stands
          * Aug. 5 Illinois basketball chat
          * Aug. 6 prep sports chat
          * Updated: Alcohol involved in incident involving state trooper, shots fired outside Steak 'n Shake
          * Raw Video: NG Interview of UI Chancellor Wise & AD Thomas


          * Dog stolen from Northbrook animal hospital
          * Carol Stream woman remembered as free spirit, adventurer
          * Rosemont dome repairs could take months
          * Weather officials say EF-1 tornado hit central Lake County
          * Gilberts No. 1 for homebuyers in website ranking

          * House lawmakers overcome hurdle on key tra...
          * Rodney Davis talks funding with Bloomingto...
          * The agency that fought Illiana gets a new ...
          * Rep. Dold takes educational cruise down Ch...
          * Lawmakers decry high turnover rate of VA h...
          * CBD Oil, and politics
          * Simon considering state Senate bid
          * Killer Congressman Tom MacArthur trying to...
          * Shutdown? State may not notice
          * Rep. Bob Dold

          * Durbin needs to act on internet tax bill -......
          * Durbin co-sponsors Mental Health Awareness......
          * Senator Durbin's Statement on President Ob......

          * Senator Mark Kirk is the Only Republican t......
          * Mark Kirk..still Mark Kirk - Jerusalem Pos......

          * Magnolia-Malden & Clarendon Park Residents Vote For Zoned Parking
          * Illinois' Mark Kirk only Republican to support Planned Parenthood in U.S. Senate vote
          * Co-founder of Greenpeace says "carbon dioxide" aren't really two dirty words
          * Special Report: State Department Watered Down Human Trafficking Report
          * In California League, Computer Calls Balls And Strikes
          * Rauner silent, Jindal ends Planned Parenthood funding
          * Arn: Kinzinger GOP challenger says he hasn't paid taxes In three years
          * Exclusive: Trump Puts Lion Killer On VP Short List
          * 8-Panel Bifold Manufactured For Home Run Inn
          * 4th video: Planned Parenthood VP says fetuses may come out intact. "It's a boy!"


          * Department on Aging Hosts Activities for Seniors and Their Families During the Illinois State Fair - August 17 is “Senior Day” – Admission is free for guests age 60 years & older
          * Illinois EPA Statement on Clean Power Plan Final Rule
          * Governor Takes Bill Action
          * Gov. Rauner and Fitness Icon Jake Steinfeld Award Three Illinois Schools for Commitment to Physical Fitness and Wellness Programs
          * Streamlined Nursing Licensure Verification Begins Today




              Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller