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Great article! Holding FITX since .002.
Medical marijuana special coming up on CNBC.
This is one solid stock. I've been in since $1.10 and slowly moving my stop loss, currently $1.57. The trend is your friend, don't try to fight it!
JP Morgan to pay $13 Billion
Source: NY Times
JPMorgan Chase and the Justice Department finalized a $13 billion settlement on Tuesday, punctuating a long legal battle over the risky mortgage practices that became synonymous with the financial crisis.
The civil settlement, which materialized after months of wrangling, resolves an array of state and federal investigations into JPMorgan’s sale of troubled mortgage securities to pension funds and other investors from 2005 through 2008. The government accused the bank of not fully disclosing the risks of buying such securities, which imploded in 2008 and helped plunge the economy to its lowest depths since the Depression.
JPMorgan’s settlement strikes at the core of the accusations, requiring the bank to pay fines to prosecutors and provide relief to struggling homeowners as well as compensation for harmed investors. JPMorgan initially planned to pay about $3 billion, a position it abandoned midway through negotiations.
The final $13 billion deal eclipses other major Wall Street settlements. In fact, it is the largest sum that a single company has ever paid to the government.
The magnitude of the payout reflects a broader strategy shift within the Justice Department to hit Wall Street where it hurts most: the bottom line. Once content to extract multimillion-dollar fines that critics dismissed as little more than a slap on the wrist, prosecutors have signaled to the nation’s biggest banks that the billion-dollar mark is a floor rather than a ceiling.
In the JPMorgan case, the Justice Department secured a range of other concessions. For one, JPMorgan had to acknowledge a statement of facts that outline the bank’s wrongdoing in the case. JPMorgan also backed down from demands that prosecutors drop a related criminal investigation into the bank and largely forfeited the right to try to later recoup some of the $13 billion from the Federal Deposit Insurance Corporation.
“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” Attorney General Eric H. Holder Jr. , said in a statement. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior.”
Underscoring the importance of the case, top Justice Department officials led the settlement talks. Mr. Holder negotiated directly with Jamie Dimon, JPMorgan’s chief executive, talking five times over the phone and meeting in person at the Justice Department in Washington.
Tony West, the No. 3 Justice Department official, played an even larger role, negotiating much of the deal with bank executives, a task that typically falls to lower-level government lawyers.
The involvement of senior officials – and JPMorgan’s status as the nation’s biggest bank – made the case a symbol of the government’s wider crackdown on Wall Street’s dubious mortgage practices. The settlement, officials say, could set a precedent for such cases against Bank of America and other major banks.
And coming fast on the heels of an announcement by federal prosecutors in Manhattan that the hedge fund SAC Capital Advisors had agreed to plead guilty and pay a record $1.2 billion fine to settle insider trading charges, the JPMorgan case suggests that Wall Street investigations are gaining momentum at the Justice Department. For years, prosecutors have come under fire for not criminally charging any top Wall Street executives involved in the crisis.
“The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over,” Mr. Holder said. “No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”
For JPMorgan and Mr. Dimon, once a favorite in Washington, the deal reflects just how far the pendulum has swung. While the settlement will remove one of JPMorgan’s biggest legal headaches, the bank continues to face a criminal investigation into its role as Bernard L. Madoff’s bank and its decision to hire the sons and daughters of some of China’s ruling elite.
The $13 billion deal also comes just days after the bank struck a separate $4.5 billion deal with a group of investors over the sale of soured mortgage-backed securities. The bank recently reported its first quarterly loss under Mr. Dimon, citing the mounting legal woes.
“We are pleased to have concluded this extensive agreement,” Mr. Dimon said in a statement on Tuesday. The bank noted in the statement that it was “fully reserved for this settlement,” which “terminates all pending civil enforcement investigations” into its residential mortgage securities.
The $13 billion payout underpins the importance of the mortgage case. The breakdown of the money includes a $2 billion fine to prosecutors in Sacramento and $4 billion in relief to struggling homeowners in hard hit areas like Detroit and certain neighborhoods in New York.
Half of that relief will go to reducing the balance of mortgages in foreclosure-racked areas and offering a so-called forbearance plan to certain homeowners, briefly halting collection of their mortgage payments. For the remaining $2 billion in relief, JPMorgan must reduce interest rates on existing loans and offer new loans to low-income home buyers. The bank also will receive a credit for demolishing abandoned homes in an effort to reduce urban blight.
The government earmarked the other $7 billion as compensation for investors. The largest beneficiary is the Federal Housing Finance Agency, which announced a $4 billion deal with JPMorgan last month. The agency oversees Fannie Mae and Freddie Mac, the housing finance giants that purchased billions of dollars in mortgage securities that later imploded.
JPMorgan will dole out the remaining compensation to a credit union association and state attorneys general in California and New York as well as the Justice Department’s own civil division.
“Today’s settlement is a major victory in the fight to hold those who caused the financial crisis accountable,” Eric T. Schneiderman, the New York Attorney General, said in a statement.
Mr. Schneiderman has helped lead a federal and state task force focused on holding banks accountable for their financial crisis-era mortgage practices. His lawsuit against JPMorgan last year was the opening salvo in the government’s fight with the bank. Under the final settlement, he collected more than $600 million in cash and $400 million in consumer relief.
Some defense lawyers question whether the punishment corresponds to the crime, noting that the $13 billion penalty would very likely wipe out about half of the bank’s annual profit. The lawyers also note that some of the mortgage securities in question are not JPMorgan’s. Instead, they belong to Bear Stearns and Washington Mutual, which JPMorgan bought at the height of the financial crisis in 2008. Mr. Dimon has called lawsuits related to Bear Stearns and Washington Mutual unfair, arguing that JPMorgan purchased the flailing lenders at the urging of the federal government.
Still, the Justice Department structured the deal in a way that focused on JPMorgan’s own securities. The prosecutors in Sacramento who collected the only fine in the case were focused on mortgage securities that JPMorgan itself sold in the lead up to the financial crisis.
And Mr. Dimon’s statements at the time suggested that the bank knew the risks of the deal. “Our eyes are not closed on this one,” he said around the time of the Washington Mutual takeover.
The $13 billion settlement took shape last month in a series of calls between Mr. Holder and Mr. Dimon. In the interest of expediting a deal, Mr. Dimon backed down on several important issues.
While the deal put numerous civil cases to rest, for example, it would not save JPMorgan from any criminal inquiries into its mortgage practices. Under the terms of the deal, the bank would also have to assist prosecutors with an investigation into former employees who helped create the mortgage investments.
That agreement represented a major concession for JPMorgan, which was seeking to put all of its mortgage-related cases behind it. Mr. Dimon abandoned that demand on one of his many phone calls with Mr. Holder.
The Justice Department also extracted a larger than expected fine from JPMorgan. The bank’s opening offer was about $3 billion, a fraction of what it paid.
At one point, Mr. Dimon asked, “What will it take to get this done?” Mr. Holder informed Mr. Dimon, who at the time was offering $11 billion, that the government would not accept less than $13 billion. And with that, they had a tentative deal.
At other moments, the bank mounted stronger objections. In a draft settlement document JPMorgan circulated to the Justice Department late last month, people briefed on the talks said, the bank sought to credit an unrelated $1.1 billion penalty toward the $13 billion settlement, a move that rankled the Justice Department.
But with the Justice Department refusing to apply the credit, the bank had to either back down or face a lawsuit. JPMorgan chose to withdraw its request.
Another flash point in the negotiations centered on mortgage securities sold by Washington Mutual. JPMorgan contends that when the bank purchased Washington Mutual in 2008, the Federal Deposit Insurance Corporation agreed to shoulder some of the liabilities stemming from the failed thrift. The Justice Department, the people said, has been adamant that JPMorgan not transfer some of the settlement costs onto the F.D.I.C. Eventually, JPMorgan blinked.
Such sticking points threatened to scuttle the deal at several turns. As talks dragged on, the Federal Housing Finance Agency ran ahead, announcing its own deal with the bank last month. That deal effectively allows JPMorgan to try to recoup about $1 billion from the F.D.I.C.
For JPMorgan, another thorny issue involved the statements of fact included in the pact. The statements, in essence, amount to admissions of wrongdoing.
For JPMorgan, any admissions had to strike a delicate balance, according to two people familiar with the bank’s thinking: satisfying the government, but not stoking private lawsuits from investors.
Despite paying a string of banner settlements this year – a $1 billion payout in September to resolve an array of government investigations into a trading loss in London, $80 million over dubious credit card products and now the $13 billion deal – Mr. Dimon appears to have a firm grip atop JPMorgan, according to several bank executives.
The bank’s board remains steadfastly behind Mr. Dimon, who holds the dual roles of chairman and chief executive. Part of that support, the executives said, traces to a widespread belief among board members that the deals represent a victory for the bank as it tries to move past its legal and regulatory woes.
The mortgage deal almost did not happen.
As the summer drew to a close, the prosecutors in Sacramento prepared to announce their civil case against JPMorgan. The prosecutors informed the bank that the lawsuit was coming on Sept. 24.
The Justice Department quietly planned a news conference to announce the case. And Benjamin B. Wagner, the United States attorney in Sacramento, boarded a plane to Washington so he could attend the news conference.
JP Morgan to pay $13 Billion
Source: NY Times
JPMorgan Chase and the Justice Department finalized a $13 billion settlement on Tuesday, punctuating a long legal battle over the risky mortgage practices that became synonymous with the financial crisis.
The civil settlement, which materialized after months of wrangling, resolves an array of state and federal investigations into JPMorgan’s sale of troubled mortgage securities to pension funds and other investors from 2005 through 2008. The government accused the bank of not fully disclosing the risks of buying such securities, which imploded in 2008 and helped plunge the economy to its lowest depths since the Depression.
JPMorgan’s settlement strikes at the core of the accusations, requiring the bank to pay fines to prosecutors and provide relief to struggling homeowners as well as compensation for harmed investors. JPMorgan initially planned to pay about $3 billion, a position it abandoned midway through negotiations.
The final $13 billion deal eclipses other major Wall Street settlements. In fact, it is the largest sum that a single company has ever paid to the government.
The magnitude of the payout reflects a broader strategy shift within the Justice Department to hit Wall Street where it hurts most: the bottom line. Once content to extract multimillion-dollar fines that critics dismissed as little more than a slap on the wrist, prosecutors have signaled to the nation’s biggest banks that the billion-dollar mark is a floor rather than a ceiling.
In the JPMorgan case, the Justice Department secured a range of other concessions. For one, JPMorgan had to acknowledge a statement of facts that outline the bank’s wrongdoing in the case. JPMorgan also backed down from demands that prosecutors drop a related criminal investigation into the bank and largely forfeited the right to try to later recoup some of the $13 billion from the Federal Deposit Insurance Corporation.
“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” Attorney General Eric H. Holder Jr. , said in a statement. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior.”
Underscoring the importance of the case, top Justice Department officials led the settlement talks. Mr. Holder negotiated directly with Jamie Dimon, JPMorgan’s chief executive, talking five times over the phone and meeting in person at the Justice Department in Washington.
Tony West, the No. 3 Justice Department official, played an even larger role, negotiating much of the deal with bank executives, a task that typically falls to lower-level government lawyers.
The involvement of senior officials – and JPMorgan’s status as the nation’s biggest bank – made the case a symbol of the government’s wider crackdown on Wall Street’s dubious mortgage practices. The settlement, officials say, could set a precedent for such cases against Bank of America and other major banks.
And coming fast on the heels of an announcement by federal prosecutors in Manhattan that the hedge fund SAC Capital Advisors had agreed to plead guilty and pay a record $1.2 billion fine to settle insider trading charges, the JPMorgan case suggests that Wall Street investigations are gaining momentum at the Justice Department. For years, prosecutors have come under fire for not criminally charging any top Wall Street executives involved in the crisis.
“The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over,” Mr. Holder said. “No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”
For JPMorgan and Mr. Dimon, once a favorite in Washington, the deal reflects just how far the pendulum has swung. While the settlement will remove one of JPMorgan’s biggest legal headaches, the bank continues to face a criminal investigation into its role as Bernard L. Madoff’s bank and its decision to hire the sons and daughters of some of China’s ruling elite.
The $13 billion deal also comes just days after the bank struck a separate $4.5 billion deal with a group of investors over the sale of soured mortgage-backed securities. The bank recently reported its first quarterly loss under Mr. Dimon, citing the mounting legal woes.
“We are pleased to have concluded this extensive agreement,” Mr. Dimon said in a statement on Tuesday. The bank noted in the statement that it was “fully reserved for this settlement,” which “terminates all pending civil enforcement investigations” into its residential mortgage securities.
The $13 billion payout underpins the importance of the mortgage case. The breakdown of the money includes a $2 billion fine to prosecutors in Sacramento and $4 billion in relief to struggling homeowners in hard hit areas like Detroit and certain neighborhoods in New York.
Half of that relief will go to reducing the balance of mortgages in foreclosure-racked areas and offering a so-called forbearance plan to certain homeowners, briefly halting collection of their mortgage payments. For the remaining $2 billion in relief, JPMorgan must reduce interest rates on existing loans and offer new loans to low-income home buyers. The bank also will receive a credit for demolishing abandoned homes in an effort to reduce urban blight.
The government earmarked the other $7 billion as compensation for investors. The largest beneficiary is the Federal Housing Finance Agency, which announced a $4 billion deal with JPMorgan last month. The agency oversees Fannie Mae and Freddie Mac, the housing finance giants that purchased billions of dollars in mortgage securities that later imploded.
JPMorgan will dole out the remaining compensation to a credit union association and state attorneys general in California and New York as well as the Justice Department’s own civil division.
“Today’s settlement is a major victory in the fight to hold those who caused the financial crisis accountable,” Eric T. Schneiderman, the New York Attorney General, said in a statement.
Mr. Schneiderman has helped lead a federal and state task force focused on holding banks accountable for their financial crisis-era mortgage practices. His lawsuit against JPMorgan last year was the opening salvo in the government’s fight with the bank. Under the final settlement, he collected more than $600 million in cash and $400 million in consumer relief.
Some defense lawyers question whether the punishment corresponds to the crime, noting that the $13 billion penalty would very likely wipe out about half of the bank’s annual profit. The lawyers also note that some of the mortgage securities in question are not JPMorgan’s. Instead, they belong to Bear Stearns and Washington Mutual, which JPMorgan bought at the height of the financial crisis in 2008. Mr. Dimon has called lawsuits related to Bear Stearns and Washington Mutual unfair, arguing that JPMorgan purchased the flailing lenders at the urging of the federal government.
Still, the Justice Department structured the deal in a way that focused on JPMorgan’s own securities. The prosecutors in Sacramento who collected the only fine in the case were focused on mortgage securities that JPMorgan itself sold in the lead up to the financial crisis.
And Mr. Dimon’s statements at the time suggested that the bank knew the risks of the deal. “Our eyes are not closed on this one,” he said around the time of the Washington Mutual takeover.
The $13 billion settlement took shape last month in a series of calls between Mr. Holder and Mr. Dimon. In the interest of expediting a deal, Mr. Dimon backed down on several important issues.
While the deal put numerous civil cases to rest, for example, it would not save JPMorgan from any criminal inquiries into its mortgage practices. Under the terms of the deal, the bank would also have to assist prosecutors with an investigation into former employees who helped create the mortgage investments.
That agreement represented a major concession for JPMorgan, which was seeking to put all of its mortgage-related cases behind it. Mr. Dimon abandoned that demand on one of his many phone calls with Mr. Holder.
The Justice Department also extracted a larger than expected fine from JPMorgan. The bank’s opening offer was about $3 billion, a fraction of what it paid.
At one point, Mr. Dimon asked, “What will it take to get this done?” Mr. Holder informed Mr. Dimon, who at the time was offering $11 billion, that the government would not accept less than $13 billion. And with that, they had a tentative deal.
At other moments, the bank mounted stronger objections. In a draft settlement document JPMorgan circulated to the Justice Department late last month, people briefed on the talks said, the bank sought to credit an unrelated $1.1 billion penalty toward the $13 billion settlement, a move that rankled the Justice Department.
But with the Justice Department refusing to apply the credit, the bank had to either back down or face a lawsuit. JPMorgan chose to withdraw its request.
Another flash point in the negotiations centered on mortgage securities sold by Washington Mutual. JPMorgan contends that when the bank purchased Washington Mutual in 2008, the Federal Deposit Insurance Corporation agreed to shoulder some of the liabilities stemming from the failed thrift. The Justice Department, the people said, has been adamant that JPMorgan not transfer some of the settlement costs onto the F.D.I.C. Eventually, JPMorgan blinked.
Such sticking points threatened to scuttle the deal at several turns. As talks dragged on, the Federal Housing Finance Agency ran ahead, announcing its own deal with the bank last month. That deal effectively allows JPMorgan to try to recoup about $1 billion from the F.D.I.C.
For JPMorgan, another thorny issue involved the statements of fact included in the pact. The statements, in essence, amount to admissions of wrongdoing.
For JPMorgan, any admissions had to strike a delicate balance, according to two people familiar with the bank’s thinking: satisfying the government, but not stoking private lawsuits from investors.
Despite paying a string of banner settlements this year – a $1 billion payout in September to resolve an array of government investigations into a trading loss in London, $80 million over dubious credit card products and now the $13 billion deal – Mr. Dimon appears to have a firm grip atop JPMorgan, according to several bank executives.
The bank’s board remains steadfastly behind Mr. Dimon, who holds the dual roles of chairman and chief executive. Part of that support, the executives said, traces to a widespread belief among board members that the deals represent a victory for the bank as it tries to move past its legal and regulatory woes.
The mortgage deal almost did not happen.
As the summer drew to a close, the prosecutors in Sacramento prepared to announce their civil case against JPMorgan. The prosecutors informed the bank that the lawsuit was coming on Sept. 24.
The Justice Department quietly planned a news conference to announce the case. And Benjamin B. Wagner, the United States attorney in Sacramento, boarded a plane to Washington so he could attend the news conference.
Great news, should be good for FNMA and FMCC.
Great post. I've been long since May. Go FNMA and FMCC.
I just went long on ACGX, I follow ~Blue~.
I actually sold my entire position Friday morning with the run up it had in the AM and have re-bought at lower prices and now again enjoying the run. I am long 3K at an average of $2.10 per share. I used some of profit and diversified a little by purchasing other equities. I was riding FMCC from $1.23
I've been long since May 2013 in both FNMA and FMCC, I sold during the last run in the highs $2's. My average for FMCC is $1.25 and FNMA $1.90. GLTA
Welcome back. I was a bit worried about not hearing your insights!
Great article. The FNMA & FMCC run is just beginning. GLTA.
Great article. The FNMA & FMCC run is just beginning. GLTA.
Www.cnbc.com/id/101018586
Great article, FNMA & FMCC are here to stay!
Www.cnbc.com/id/101018586
Great article, FNMA & FMCC are here to stay!
I don't care if anyone believes what I have to say and don't expect you too.
Lets let the stock price do the talking.
Go MARA!!! $1 by September.
MARA, huge accumulation day. When news hits the wire of who bought almost 2 million shares of this company the price will explode. Volume is way above average and price not moving, that's a pretty good sign and usually happens before major runs. GLTA!
I received a very good tip from someone buying almost 2 million shares. This person is a big time ex hedge fund manager, his first name is Jeff. I am sure that when this news hits the wire MARA will take off and there is no looking back. I wish I could disclose more information but I do not want anything to back fire when I sell my .42 add.
added more FNMA at $1.84, $1.80 seems to be a bottom for now.
I sold 1/2 my position at $1.91, $1.95's did not hold. will look to add lower.
Thats my loading area as well.
Great article.
This is great news. I am long and holding strong with an average of $1.60.
My take on tomorrow: sell off to $2 area of support and bounce higher trapping shorts in a major shortsqueeze, bringing FNMA to test $2.70 resistance. $3 is a strong resistance, if we break $3 easy $3.15-.20 close.
If $2's don't hold, sadly we might see $1.40's. this is highly unlikely and should not be a concern for those who are long and looking at the bigger picture (2-3 month, stock price at $7-8 per share).
Smart money loading FNMA. Hold on to your shares and see your $ grow.
GLTA!!!
Go FNMA!
I am right there with you. I have been long for about 2 weeks with a lot of purchases placing me at an average of $1.50. I went on vacation for a week to Europe but flew back yesterday to find FNMA at $2.70, I have no panicked and sold any of shares and unfortunatly, I do not have any funds today to buy on this pull back. The pull back has been bad for those who bought high, but at the same time this pull back is healthy. Last week Monday it was at $1.36, things cant go up forever.
Nothing about FNMA or FMCC has changed, they are still great stocks that posted awesome financial numbers. Do not let MM shake you out. Average down and watch your profits grow.
GLTA. I do see FNMA at above $10 a share by end of July. The fluctuations in between will be insane though.
FNMA $1.47 new HOD
FNMA huge buys coming in
FNMA is very bullish right now, is has been consolidating nicely and trending higher most of the day. This is a swing long play and small fluctuation in price dont really concern me. I'll be retiring when I am done with FNMA.
most likely, positive housing numbers would send this to the sky
Just longed FNMA 1.47, to the moon!
just received a new email from PennyStockUniverse and Preferred Penny Stocks. XUII is far from done and just beginning. GLTA. I called this action at .265.
XUII bouce time. bottom set at .265 for the day. North from here.
This is a good/healthy wash-out imo. APS usually does this, it should bottom out soon and then watch the red to green move and the explosion into .50.
Loading more XUII at this levels, this is a bargain. Load up everyone and watch the amaZing bounce.
XUII grinding higher, I see a new high of day coming soon. Get ready folks all the indicators are showing nothing but upward momentum. A shake is expected and it would a great opportunity to reload at anything on the .38-.40 if it hits those levels on the pull back after the new high of day. Get ready for $1 land by end of week. Low float can really make this move fast. GLTA.
Just went long on XUII. this baby is going to run so hard. I see $1 by midweek. GLTA
HIDC getting ready for new high of day. Oh baby, go HIDC, Go HIDC!!!
HIDC sure looks good at this levels. I loading at any chance I get. Currently have a big position at an average of .02, not proud of my bagholding .04's from a previous run. But see huge potential here. IMO. GLTA.
Is go time for HIDC. This stock has clearly hit bottom and and the shares that needed to be dumped have already been dumped. From now on is just slow grind back to penny land. I see this ending the week at .01+. GLTA
I am loading HIDC at this levels. Will see a bounce soon imo. Buy now, smile later. GLTA.
COIN is moving up nicely, everyday making higher highs and lower highs. I have loaded here on the very bottom and wont be the one chasing this stock when it hits the pennies and PR's come out. Buy now that is early and watch your $ grow.