FILE – The JPMorgan Chase & Co. logo is displayed at their headquarters in New York, in this Monday, Oct. 21, 2013, file photo. A person close to the talks says the Justice Department and JPMorgan Chase & Co. have reached agreement on all issues in a $13 billion settlement of a civil inquiry into the company’s sales of low-quality mortgage-backed securities that collapsed in value in the financial crisis. (AP Photo/Seth Wenig, File)
WASHINGTON (AP) — JPMorgan Chase & Co. has agreed to pay $13 billion in a landmark settlement and acknowledged that it misled investors about the quality of risky mortgage-backed securities ahead of the 2008 financial crisis.
The settlement announced Tuesday with the Department of Justice is the largest ever between the U.S. government and a corporation. It also included settlements with New York, California and other states.
JPMorgan was among the major banks that sold securities that plunged in value when the housing market collapsed in 2006 and 2007. Those losses triggered a financial crisis that pushed the economy into the worst recession since the 1930s.
The deal was reached after months of negotiations and could serve as a template for similar settlements with other big banks. As part of the deal, JPMorgan agreed to provide $4 billion in relief to homeowners affected by the bad loans. The bank also acknowledged that it misrepresented the quality of its securities to investors.
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