After another week of intense negotiations, the Justice Department and JPMorgan Chase continue to inch closer to a multibillion-dollar accord over questionable mortgage practices. No one can be certain how much the bank will have to pay, but everyone seems to have an opinion.
On Monday, DealBook reported that a proposed settlement figure of about $20 billion was once discussed at the bank. On Tuesday, proposals emerged that ranged from $3 billion to about $7 billion. On Thursday, DealBook reported that JPMorgan raised its total offer to $11 billion earlier in the week.
But it isn’t all about the money, insists the investment bank. Ben Protess and Jessica Silver-Greenberg reported:
“The size of the fine is not the central negotiating point for the bank: JPMorgan is instead focused on using the wide-ranging pact to resolve many of the mortgage-related investigations it faces. Most important, the bank is asking that prosecutors in California drop a criminal investigation into the bank’s mortgage practices — a request that the Justice Department has yet to meet.”
If money isn’t the sticking point, there were plenty of other suggestions for a deal.
A DealBook reader in New York asked “What type of activity can be considered so egregious that it justifies an 11 billion dollar fine yet not one individual is personally liable for it?”
The Trade columnist, Jesse Eisinger of ProPublica, said that top JPMorgan executives should have been charged with misleading disclosure in the $6 billion London Whale trading loss.
And LeRoy Ward of Manhattan, commenting on the photograph of Mr. Dimon showing his ID at the Justice Department, wondered if JPMorgan could “donate money to the DMV to upgrade these worthless pieces of plastic?”
A look back on our reporting of the past week’s highs and lows in finance.
FRIDAY, SEPT. 27
Headphones Maker Finds Fans in Private Equity | Beats Electronics has secured a $500 million minority investment from the Carlyle Group. The electronics maker will also buy back a 25 percent stake held by HTC. DealBook »
British Postal Service Valued at $5.3 Billion in I.P.O. | “This will give Royal Mail access to the private capital it needs to modernize,” Vince Cable, the business secretary, said. DealBook »
THURSDAY, SEPT. 26
JPMorgan Urged to Pay More in Mortgage Deal | The bank’s chief executive took the rare step of meeting with Attorney General Eric H. Holder Jr. in Washington to discuss the deal. DealBook »
A Proposal to Freeze Pensions in Detroit | Mounting evidence shows that the city’s pension system for public workers was operated in an unsound manner for many years. DealBook »
Accountant Who Worked With Madoff for Years Is Indicted in Fraud | Federal authorities, broadening their investigation of Bernard L. Madoff’s multibillion-dollar Ponzi scheme five years after the fraud was uncovered, unveiled criminal charges against Paul J. Konigsberg. DealBook »
Company Looted, S.E.C. Sues Its Former Chairman | The Securities and Exchange Commission accused Chan Tze Ngon of the American-listed ChinaCast Education Corporation of stealing $41 million from investors. DealBook »
In This Battle Arena, Warriors Are Armed With Algorithms | BattleFin, a recruitment firm for hedge funds, stages tournaments to find math whizzes who can apply their knowledge of other fields to the financial world. DealBook »
WEDNESDAY, SEPT. 25
Detroit Spent Billions Extra From Pensions | Detroit’s municipal pension fund made payments for decades to retirees, active workers and others above and beyond normal benefits, costing the struggling city billions of dollars and helping push it into bankruptcy. DealBook »
Fund to Let Investors Bet on Price of Bitcoins | SecondMarket began raising money for an investment fund — the first of its kind in the United States — that will hold only bitcoins. DealBook »
Alibaba, Giant of China’s Internet, Will Issue Its I.P.O. in New York | The offering could value Alibaba at more than $75 billion, slightly bigger than eBay and more than twice as large as Yahoo. DealBook »
U.S. and British Officials Fine Firm in Libor Case | Regulators said that ICAP’s employees had altered the reported figures from which Libor is compiled, in exchange for promises of curry meals, steaks, a Ferrari and financial payments. DealBook »
Britain Sues to Stop Cap on Bonuses for Bankers | The step is the latest in Britain’s campaign against a decision by European lawmakers this year to limit bonus payments at Europe’s largest financial institutions to one year’s base salary. DealBook »
The Trade: In JPMorgan Chase Case, a Missed Opportunity to Charge Its Executives | The Securities and Exchange Commission wrung an admission of wrongdoing out of the bank, but it did not charge any top executives with misleading disclosure, says Jesse Eisinger of ProPublica. DealBook »
TUESDAY, SEPT. 24
SAC Is Said to Negotiate Settlement of Charges | The government is seeking a guilty plea from SAC and a financial penalty of as much as $2 billion. DealBook »
JPMorgan May Settle With Group of Agencies | Although the ultimate amount is still in flux, it is clear that any deal would dwarf the size of other settlements the bank has reached to resolve separate regulatory issues. DealBook »
2 Rivals in Equipment for Making Chips in Deal | With the chip-manufacturing industry facing more pressure, Applied Materials is aiming to shore up its business in a big way by striking a big takeover of a Japanese company. DealBook »
A Fund Manager Awaits a Market Fall | Mark Spitznagel of Universa Investments is forecasting a steep market drop: until that happens, he is shorting the market and losing money. DealBook »
Tougher Laws Sought on High-Tech Theft | New York’s penal laws have changed little since 1965, according to a report by the Manhattan district attorney, leaving laws against electronic crimes outmoded. DealBook »
Deal Professor: Lax Rules Give U.S. Upper Hand in Tussle Over Alibaba I.P.O. | Deregulation has helped the United States maintain its pre-eminence in the competition for global I.P.O.’s, but perhaps at a price, says Steven M. Davidoff. DealBook »
MONDAY, SEPT. 23
BlackBerry Buyout Offer Raises Array of Questions | Not only are there questions about the $4.7 billion offer, several analysts say it is not clear how the Fairfax group could stem BlackBerry’s rapid decline or stabilize the company. DealBook »
JPMorgan’s Legal Hurdles Expected to Multiply | JPMorgan Chase paid $1 billion to resolve an array of government investigations last week. But its biggest battles with federal authorities may still lie ahead. DealBook »
DealBook Column: As JPMorgan Settles Up, Shareholders Are Hit Anew | The $920 million JPMorgan Chase agreed to pay to settle S.E.C. civil allegations sounded like a lot, but the money is actually coming from the firm’s shareholders, who already took a $6 billion hit, says Andrew Ross Sorkin. DealBook »
Union Push for I.P.O. Forces Filing at Chrysler | Chrysler filed for a public stock offering, acting only under pressure from its second-largest shareholder, a trust set up to provide medical coverage for 115,000 retired autoworkers and their relatives. DealBook »
Detroit’s Casino-Tax Dollars Become Big Issue in Bankruptcy Case | An insurer has filed a lawsuit, trying to block a deal Detroit reached over interest-rate swaps. DealBook »
Arguments Begin in a Bitter Family Brawl Over a Media Mogul’s Estate | Samantha Perelman is suing her uncle, the head of the Hudson Media empire, over what she says is her rightful $700 million share in her grandfather’s fortune. DealBook »
Concessions From Trust Don’t Placate All Investors | Activist investors say CommonWealth excessively rewards the embattled father and son team of Barry M. and Adam D. Portnoy at the expense of shareholders. DealBook »
In Latin America, Brazilian Banks Fill Void Left by Global Giants | As the big international investment banks pull back from Latin America, BTG Pactual and Itaú BBA are expanding there. DealBook »
WEEK IN VERSE
‘I Can’t Drive 55’ | What do investment bankers listen to while flying to Washington to meet with the Justice Department? YouTube »
‘Highway to Hell’ | What does DealBook listen to while taking Amtrak to Washington to cover another regulatory hearing? YouTube »