JPM, that arrogant too-big-to-fail bank and its corrupt CEO Dimon, backing all those corrupt politicians in Washington D.C., only came to the settlement table in earnest, when faced with the prospect of a CIVIL lawsuit [where the government could conduct discovery, asking questions under oath, thereby exposing individuals to actual accountability, blame, and perhaps perjury charges], and JPM only increased its settlement offer when faced with the prospect of criminal charges.
The Presidential cuff-link-wearing Dimon, called Holder, only hours before the press conference at which the civil lawsuit would be announced.
Why the hell would Holder “scuttle the news conference?” If Dimon was reaching out to settle, only hours before the news conference, then why did not Holder demand more than $13 Billion? Why did not Holder demand disgorgement of ALL profits, plus a fine, from the fraud that JPM committed? If the lawsuit was all teed up, what would the harm have been from filing it and pursuing it with discovery, depositions, the works?
One negotiates successfully either from a position of weakness or a position of power. The one in the position of power gets the better deal.
Why the hell did Holder cave at this point? Dimon had NOTHING to offer, and the case would only have gotten stronger once depositions and discovery started in earnest.
The obvious truth here, is that BOTH Holder and Dimon needed a settlement for their own personal reasons.
By California Lawyer, TFMetalsReport:
JPM is in the news again, no surprise. But this revelation should make you sick to your stomach. I am.
Tony West, the associate attorney general, then had a meeting with the bank in his conference room at the Justice Department in Washington. It was at that meeting in July that the talks broadened to include other mortgage-related cases.
In addition to the civil and criminal cases in Sacramento, which focused on the bank’s own mortgage securities, other cases zeroed in on securities sold by Bear Stearns and Washington Mutual. The Justice Department’s civil division had an inquiry into Bear Stearns, prosecutors in Pennsylvania were scrutinizing deals from Washington Mutual and New York’s attorney general had already filed a lawsuit involving Bear Stearns.
Then, about the time of another meeting in early August, JPMorgan asked to include a lawsuit from the Federal Housing Finance Agency. The agency, which sued JPMorgan over loans the bank and Bear Stearns had sold to Fannie Mae and Freddie Mac, would go on to make up a big part of the $13 billion pact.
But at that point, one person briefed on the talks said, the bank was offering only $1 billion to settle. Another person said the $1 billion offer was not meant to include the F.H.F.A. case.
Either way, by mid-August, settlement talks had stalled somewhat. They were far apart on the monetary penalty, and JPMorgan continued to push for the Sacramento prosecutors to drop the criminal inquiry, a request the government resisted.
The criminal case was still at an early stage. But the prosecutors in Sacramento had all but finished their civil lawsuit against the bank. And so they informed the bank that a lawsuit was coming on Sept. 24.
In the lead-up to that deadline, the people briefed on the talks said, JPMorgan’s lawyers raised the offer to $3 billion. They conveyed it to Mr. West, who became the central negotiator for the government. But Mr. Holder rejected the offer, telling colleagues it was still too low.
In the days that followed, the Justice Department quietly planned the news conference to announce the civil case.
Benjamin B. Wagner, the United States attorney in Sacramento whose investigation into the bank’s mortgage practices led to the charges, boarded a plane to Washington so he could attend a news conference the next day. And during a 45-minute meeting at the Justice Department, Mr. Holder gathered with top aides in his fifth-floor conference room to prepare for the news conference.
But at 8 a.m. on Sept. 24, just four hours before the scheduled news conference, Mr. West received a call from an unexpected source: Mr. Dimon.
“I think we should meet in person,” Mr. Dimon said, one person briefed on the call said.
The meeting took place in Mr. Holder’s conference room two days later. Mr. Dimon’s entourage included his general counsel, Stephen Cutler, and his outside counsel, H. Rodgin Cohen of Sullivan & Cromwell.
Progress was made. The bank had agreed to enhance the offer to $11 billion, including the $4 billion for homeowners. And both sides discussed how to deploy the relief, including through reductions in mortgage balances. But a deal had yet to emerge. The Justice Department still wanted more money. And it informed the bank that to resolve the criminal investigation in Sacramento, it should plead guilty to a criminal charge. The bank balked.
“On Sept. 24, four hours before the Justice Department was planning to hold a news conference to announce civil charges against the bank over its sale of troubled mortgage investments, Mr. Dimon personally called one of Attorney General Eric H. Holder Jr.’s top lieutenants to reopen settlement talks, people briefed on the talks said. The rare outreach from a Wall Street C.E.O. scuttled the news conference and set in motion weeks of negotiations that have culminated in a tentative $13 billion deal, according to the people briefed on the talks.”
“Separately, Mr Dimon is returning to Washington for a scheduled meeting, with other bank executives, with President Barack Obama on Wednesday.”