U.S. government to sue JPMorgan in mortgage case

The U.S. Justice Department is preparing to sue JPMorgan Chase & Co over mortgage bonds it sold in the run-up to the financial crisis, a sign the bank's legal troubles are not yet over.

A lawsuit, first reported by Reuters, could come as early as Tuesday, people familiar with the matter said on Monday.

JPMorgan spokesman Brian Marchiony and Justice Department spokeswoman Adora Andy Jenkins 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 have concluded that JPMorgan committed civil violations of securities laws in offering mortgage bonds from 2005 to 2007 that were backed by subprime and other risky residential mortgages.

The expected charges come less than one week after the largest U.S. bank paid $1 billion to resolve investigations into its "London Whale" trading scandal and issues surrounding the wrongful billing of credit-card customers. Read more >>

Elizabeth Warren Reads Riot Act to Holder for Not Prosecuting Big Bank Mortgage Fraud

Okay, so Senator Warren actually wrote a polite, detailed letter to Attorney General Holder. There was no shouting or acrimony.

However, in Washington, for a freshman senator to imply in official correspondence made public that the Department of Justice is not doing its job in investigating, prosecuting and even fining banks and secondary lenders in regards to multiple counts of mortgage lending violations is akin to a freshman at high school accusing the principal of letting teachers steal milk money from the desks of students.

It may be professional in tone, but Warren's letter is a direct challenge to the criminal impunity provided to and limited fines assessed by the DOJ on Wall Street for their multiple schemes to defraud both mortgage borrowers and investors.

The Huffington Post featured the letter, which bluntly states:

I am concerned that this might be yet another example of the federal government's timid enforcement strategy against the nation's largest financial institutions. I believe that if DOJ and our banking regulatory agencies prove unwilling over time to take the big banks to trial or even require admission of guilt when they cheat consumers and break the law -- either out of timidity or because of a lack of resources -- then the agencies lose enormous leverage in settlement negotiations.

There are a number of federal agencies involved in the lax regulation and minimal punishment (no jail time) of the financial industry for its role, particularly in the creation of a toxic subprime mortgage scam, in the economic collapse that burst open in the autumn of 2007. Read more >>

Halliburton pleads guilty to destroying Gulf spill evidence

Halliburton knew (Photo credit: Marcellus Protest)

Halliburton Co has agreed to plead guilty to destroying evidence related to the 2010 Gulf of Mexico oil spill, the U.S. Department of Justice said on Thursday.

The government said the guilty plea is the third by a company over the spill, and requires the world's second-largest oilfield services company to pay a maximum $200,000 statutory fine. Halliburton also made a separate, voluntary $55 million payment to the National Fish and Wildlife Foundation, the Justice Department said.

Halliburton also agreed to three years of probation, and to continue cooperating with the criminal probe into the April 20, 2010 explosion of the Deepwater Horizon drilling rig.

Court approval of the settlement is required. A Halliburton spokeswoman did not immediately respond to requests for comment.

The disaster caused 11 deaths and triggered the largest U.S. offshore oil spill following the rupture of the Macondo oil well, which was 65 percent owned by BP Plc. Halliburton had earlier provided cementing services to help seal the well. Read more >>

Justice Department Investigates Acorn

The New York Times reports an internal watchdog at the Justice Department said he was reviewing the agency’s involvement with the national community organizing group Acorn. Inspector General Glenn Fine wrote to Representative Lamar Smith, Republican of Texas, that his office would examine whether Acorn sought or received any Justice Department grant money, or conducted any reviews of the group’s use of such money. More than a dozen state and local authorities are also scrutinizing Acorn, including Maryland’s attorney general.

Bloomberg indicated the inspector general’s probe “will help Congress ensure that money allocated to support law enforcement efforts is not instead used to support criminal conduct,” Smith said in a statement. An initial review by Acorn showed it received $12,000 from the Justice Department since January 2008, according to the group. The House on Sept. 17 voted to cut all federal funding for the group. Acorn has received more than $53 million in federal funds since 1994, according to a report by Republicans on the House Oversight and Government Reform Committee.