Eric Holder to Banks: No One Is Out of the Woods Just Yet
Not only is the Justice Department close to making a decision in numerous investigations into large financial companies, he added, but several new cases dealing with the financial crisis will be announced in the coming months. Beyond that brief statement, Holder declined to explain any specifics regarding those potential cases, including whether the charges would be civil or criminal. However, his meaning was clear — the federal government still has much to litigate.
, JPMorgan Chase (NYSE:JPM) revealed in a regulatory filing earlier this month that it was facing criminal and civil investigations by the Justice Department involving sales of mortgage-backed securities for 2005 to 2007, while Bank of America (NYSE:BAC) was charged on August 6 with with defrauding investors when it sold $850 million worth of mortgage-backed securities.
For both banks, these accusations make it more difficult for them to persuade investors that their legal troubles are in the past, which is exactly what Holder wants. In total, according to public filings and the Journal’s sources, seven separate probes are looking into various aspects of JPMorgan’s past operations, ranging from mortgage-backed securities during the housing bubble to the alleged manipulation of energy markets in California and the midwest.
When asked about the bank and its Chief Executive Officer James Dimon, Holder said he could not discuss specific cases. However, he did emphasize that, “No individual, no company is above the law. We don’t investigate companies based on who a CEO is, but we don’t avoid investigating companies based on who the CEO is, either.”