Back in June, due to the FHFA’s streamlined loan modification program, JPMorgan Chase has announced that more than 20,000 employees would be laid off. Now, in the wake of massive government investigation, Chase is laying off over 470 employees in the north Texas region. This is supposedly due to less people being behind on their mortgage payments compared to previous years, according to a Chase spokesperson. The jobs cut were in the mortgage default sector, however; some are pointing to the fact that the company is under investigation by the United States government over charges of criminal practices related to sales of mortgage-backed securities (MBS).
“No one should be surprised that JPMorgan Chase may be charged with wrongful or criminal conduct. They’ve got a record that would make Al Capone look like a neighborhood criminal,” said David Kelleher, president of Better Markets, a government watchdog group.
One of the more impressive things about all the trouble JPMorgan Chase has faced over the course of recent years since the housing bubble burst is that the company’s bottom line hasn’t really been affected, resulting in current CEO Jamie Dimon’s job being secure. The criminal and civil litigation measured against Chase is being run by the U.S. Attorney's Office for the Eastern District of California.
“You can often bring dual investigations, civil and criminal, in order to maximize pressure for a global civil resolution,” said Professor John Coffee of Columbia Law School.