JP Morgan Chase, Credit Suisse pay $416.9m penalties for phony residential mortgage-backed securities

JP Morgan Chase and Credit Suisse will pay a combined $416.9 million to settle US civil charges that they misled investors in the sale of risky mortgage bonds prior to the 2008 financial crisis…

JP Morgan would pay $296.9 million, while Credit Suisse will pay $120 million in a separate case, with the money going to harmed investors, the US Securities and Exchange Commission said.

Both settlements addressed alleged negligence or other wrongdoing in the packaging and sale of risky residential mortgage-backed securities (RMBS), including at the former Bear Stearns Co, which JP Morgan bought in 2008. The banks settled without admitting wrongdoing and in separate statements said they were pleased to settle…

Goldman Sachs in 2010 agreed to pay $550 million, also without admitting wrongdoing, to settle SEC charges that it misled investors in a complex mortgage bond transaction.

The enforcement actions are the second and third from a “working group” of federal and state agencies created this year by President Barack Obama to investigate misconduct related to RMBS that contributed to the financial crisis.

And they ain’t over and done, yet.

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