Jamie Dimon goes to Washington as mortgage settlement talks heat up
NEW YORK -- Even the “King of Wall Street” has to show his ID to security at the Justice Department.
Jamie Dimon, chairman and chief executive of JPMorgan Chase & Co., was photographed flashing his New York driver’s license Thursday morning on his way to meet with U.S. Atty. Gen. Eric Holder to discuss possibly settling of a bunch of government investigations.
The nation’s largest bank could pay anywhere from $3 billion to $11 billion to settle a range of federal and state probes, according to a person familiar with the negotiations who was not authorized to speak publicly.
The negotiations were fluid and the headline settlement amount could easily change if an agreement is reached, this person noted.
The investigations reportedly involve mortgage-backed securities, many of them stemming from troubled banks Bear Stearns and Washington Mutual that JPMorgan acquired during the financial crisis.
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Reports earlier this week indicated the U.S. attorney’s office in Sacramento was preparing to file a civil case against JPMorgan. Subsequent reports said JPMorgan resumed settlement talks that would resolve not only that case but a number of continuing investigations.
While JPMorgan’s stock slumped Monday and Tuesday, shares were up slightly in early trading on Thursday. Shares rose 15 cents, or 0.3%, to $51.85; major U.S. stock indexes were also edging higher on Wall Street.
Even with JPMorgan forking over a massive sum, investors will likely welcome a resolution to the long-running government investigations, said Erik Oja, a banking analyst at S&P; Capital IQ.
“The $11 billion could take out a lot of the government’s claims,” Oja said. “That would go a long way to improving the certainty around JPMorgan Chase.”
Investors were also likely to shrug off a massive payout. The New York company has already set aside an undisclosed amount in reserves to pay for such legal costs, and analysts expect it to earn $23 billion for all of this year, Oja said.
“They’ll survive,” he said.
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