JP MORGAN could face another legal suit as the US Justice Department plans to sue the bank over mortgage bonds sold in the boom years, it emerged last night.
It comes less than a week after the bank paid $920m (£573m) to settle with regulators on both sides of the Atlantic over the London Whale derivatives trading scandal, which itself lost the bank $6.2bn last year.
A lawsuit could come as early as today, people familiar with the matter told Reuters.
JP Morgan and the Justice Department declined to comment.
The bank disclosed in August that federal prosecutors in California were conducting criminal and civil investigations into the bank’s mortgage securities.
In those investigations, government lawyers concluded that JP Morgan committed civil violations of securities laws in offering mortgage bonds from 2005 to 2007 that were backed by subprime and other risky residential mortgages.
City A.M. Reporter