JP Morgan to pay $13 billion settlement, admits wrongdoing

JP Morgan agreed to pay a $13 billion settlement, and admitted to engaging in fraud and misrepresentation in its actions leading up to the financial collapse. Credit: Reuters
JP Morgan agreed to pay a $13 billion settlement, and admitted to engaging in fraud and misrepresentation in its actions leading up to the financial collapse.
Credit: Reuters

A satisfied Attorney General Eric Schneiderman announced today the long-awaited outcome of the suit he brought against JP Morgan a little over a year ago.

The financial giant will be paying out $13 billion to various injured parties — the largest settlement with a single entity in U.S. history, according to the A.G.’s office.

Schneiderman said more than $1 billion will go specifically to New York state.

“New Yorkers are getting good justice in this settlement,” Schneiderman said.

$613 million of that $1 billion will be paid out in cash. An additional $400 million in “consumer relief” is expected though the exact figure is still being worked out, Schneiderman said.

The cash portion will be divvied up for several uses, Schneiderman said. One of those uses will be to fund legal services to those who are still suffering from the aftereffects of the fiscal crisis caused in large part by the fraud and misrepresentation perpetrated by JP Morgan, Bear Stearns, and others.

Jennifer Ching, the director of Queens Legal Services, said her office is still packed daily with New Yorkers who have been struggling for over four years at this point.

The money is also intended to help New Yorkers impacted by superstorm Sandy.

Schneiderman said that JP Morgan deserved credit for being the first of the banks and hedge funds involved in the financial crisis to admit wrongdoing and reach a settlement that offers some compensation to those they harmed. He and Michael Stephens, the acting Inspector General of the Federal Housing Finance Agency, promised they would continue to pursue restitution from the others involved.

But in answer to a claim that Bank of America reportedly said they anticipate being sued by Schneiderman, the A.G. hedged and said he “can’t comment on when that action might be filed.”

Some of the JP Morgan settlement will be tax deductible. Schneiderman promised at least $2 billion would not be, as it has been designated a penalty. Part of the settlement involved an agreement to not treat Bear Stearns and Washington Mutual’s payout as a penalty. Schneiderman said whether the rest of the settlement is tax-deductible will be largely up to the Internal Revenue Service.

Follow Danielle Tcholakian on Twitter @danielleiat


News
Entertainment
Sports
Lifestyle
News

OMG! Exercise can make skin (and butt) look…

A moderate exercise regime can turn back time and actually reverse the skin's aging process, according to new research. The study showed that a minimum…

News

Mets mascot Mr. Met target of Bill Clinton…

Mets mascot Mr. Met has told how he ended up in the crosshairs of a Secret Service sniper rifle. The man behind the Mr. Met…

International

Jews in eastern Ukraine ordered to register, Kerry…

Secretary of State John Kerry condemned reports that Jews in eastern Ukraine had been ordered to register with the authorities "or suffer the consequences."

National

Chelsea Clinton pregnant with first child

Chelsea Clinton is pregnant with her first child.

Television

'Scandal' recap: Season 3, Episode 18, 'The Price…

Sally is Jesus, Olivia caused global warming, and Mellie's still drunk. Let's recap the Scandal finale. A church full of Washington insiders is about to…

Movies

Review: 'Transcendence' is not stupid but sometimes lacks…

The cyberthriller "Transcendence" explores artificial intelligence, nanotechnology and other ethical quandaries, but has too much ambition, if anything.

Television

Dick Wolf to bring fictionalized world of 'Law…

A&E has ordered a pilot called "D.O.A." from "Law and Order" mastermind Dick Wolf that will focus on real detectives reexamining cold cases. A trio…

Television

Shane West talks WGN America's 'Salem'

The actor on history lessons, a new network and showing his butt.

NHL

Rangers draw first blood against Flyers in Game…

Brad Richards and Derek Stepan scored power-play goals 47 seconds apart to lead the Rangers to a 4-1 win.

NBA

Carmelo Anthony agonizing over Knicks future as season…

There’s still the cloud hanging over the franchise’s head as to the pending free-agent status of All-Star forward Carmelo Anthony.

NFL

Jets host players with eye toward NFL Draft

The Jets hosted a number of NFL Draft hopefuls for workouts on Thursday, with an eye toward some under-the-radar players.

NFL

Chris Johnson: I wanted to go to 'a…

Now that Chris Johnson is a Jet, the team has to figure out if one of the most explosive players in the NFL over the last half decade has anything…

Style

Light-up nail art syncs with phone

This Japanese technology syncs light-up nail art with your phone.

Wellbeing

Why is dance cardio taking off in NYC?

Instructors at some of the city's hottest classes explain why.

Travel

Earth Day travel in the Florida Keys

See why this eco-friendly destination deserves your attention.

Tech

Sorry, Facebook — FarmVille goes mobile with 'Country…

Zynga has released a version of the hit "FarmVille" tailored for smartphones and tablets in the hope of reaping a bumper crop of players.