JP Morgan asked for $6bn to settle claim over mis-selling

Michael Bow
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JP MORGAN Chase is being asked for $6bn (£3.9bn) by US housing finance regulators to settle allegations it mis-sold mortgage-backed bonds, it emerged yesterday.

The Federal Housing Finance Agency (FHFA) sued the bank in 2011 over allegations it mis-sold bonds backed by sub-prime mortgages to government guarantors Fannie Mae and Freddie Mac. The FHFA, which sued another 17 banks over the incident, declined to comment.

It adds to the pressure on the bank after a former JP Morgan Chase trader accused of allegedly helping disguise the $6bn London whale trading loss was released by Spanish authorities last night – despite still being wanted in the US on fraud charges.

Javier Martin-Artajo, the boss of the man behind the bad trades Bruno Iksil, was arrested by Spanish authorities earlier in the day, Spain’s interior ministry confirmed yesterday. He denied charges. His lawyer Lista Cannon did not respond for comment. JP Morgan declined to comment. Shares fell 2.32 per cent.