Image Image Image Image Image Image Image Image Image Image

Elliott Morss | January 18th, 2018

Scroll to top


One Comment

The JP Morgan Case Is Very Important

The JP Morgan Case Is Very Important
© Elliott R. Morss, Ph.D.

JP Morgan has agreed to a settlement of $13 billion for fraudulent acts. $13 billion is a lot of money.

The fact that JP Morgan, with its high-powered attorneys, is willing to offer $13 billion to settle this and still allow at least some criminal cases to play out is highly significant.

It means that finally, the US government has decided to go after the big banks in a serious way. It also means there has to be real evidence of fraud.

However, I have no idea what the fraud was. All the big banks were buying and selling these mortgage packages for sizable commissions. They all knew what was in them: who was kidding whom?

In the latest NYT article on the subject, there was mention of a lawsuit brought by Federal Housing Finance Agency. The FHFA through its affiliates Fannie Mae and Freddie Mac was buying all the mortgage paper they could get their hands on. JP Morgan was “fooling” these huge mortgage purchasers? Hard to believe.

However, in law, precedent is important. So if the Justice Department can get a settlement from JPM of this magnitude for “misrepresentation”, other bank cases can be expected.

And it is notable that JP Morgan is not insisting that criminal prosecutions stop as part of the settlement. That means its lawyers believe the Justice Department has a pretty strong case.

And in the US heartland, there will be great support for lawsuits against banks, particularly if criminal actions against individuals follow.

The “heartland” does not really understand what the banks did. But there is a general awareness that what they did led to the greatest global recession since 1929.

There is also a strong sense that bankers get paid far too much.

And JPM, even with this settlement, cab expect more problems. European governments have launched their own lawsuits and are watching the Justice Department lawsuit play out with great interest….


  1. I’m happy to see that massive banks, or at least one massive bank is being held accountable for criminal actions. $13 billion is huge, but I couldn’t imagine what it would have been if they didn’t settle. It is a shame however, that the details of what is going on aren’t being released. For instance, if the case against JPM is so large, it had to affect several people. In this case, it had a part in a world wide recession. So, why aren’t we being informed of what the fraud was? How can Americans rally behind action to improve the banking system if they don’t know what is wrong with it? Thanks for the great read…if you get any further details, please update us on the matter!

Submit a Comment