JP Morgan Faces Criminal Probe

NEW YORK — JPMorgan says it is facing a federal criminal probe relating to mortgage-backed securities sold in the run-up to the financial crisis.

The New York-based bank says it received notice in May that the civil division of the U.S. Attorney’s office for the Eastern District of California had concluded JPMorgan violated certain federal securities laws in connection with the sale of mortgage-backed securities.

The probe, along with one by the office’s criminal division, relates to securities backed by subprime mortgages and so-called Alt-A mortgages, loans that are less risky than subprime loans, but riskier than prime loans.

JPMorgan Chase & Co. made the disclosure in a regulatory filing late Wednesday.

The disclosure came a day after the U.S. government accused Bank of America Corp. of civil fraud.


Source: Associated Press