JP Morgan Chase 2013 Annual Report Download - page 188

Notes to consolidated financial statements
194 JPMorgan Chase & Co./2013 Annual Report
Subsequent events
Settlement agreement with The U.S. Departments Of
Justice, Housing and Urban Development, and Veterans
Affairs, and The Federal Housing Administration
On February 4, 2014, the Firm announced that it had
reached a settlement with the U.S. Attorney’s Office for the
Southern District of New York, Federal Housing
Administration (“FHA”), the U.S. Department of Housing and
Urban Development (“HUD”), and the U.S. Department of
Veterans Affairs (“VA”) resolving claims relating to the
Firm’s participation in federal mortgage insurance
programs overseen by FHA, HUD and VA (“FHA
Settlement”). Under the FHA Settlement, which relates to
FHA and VA insurance claims that have been paid to the
Firm from 2002 through the date of the settlement, the
Firm will pay $614 million in cash, and agree to enhance its
quality control program for loans that are submitted in the
future to FHA’s Direct Endorsement Lender Program. The
Firm is fully reserved for the settlement, and any financial
impact related to exposure on future claims is not expected
to be significant.
Madoff Litigation and Investigations
On January 7, 2014, the Firm announced that certain of its
bank subsidiaries had entered into settlements with various
governmental agencies in resolution of investigations
relating to Bernard L. Madoff Investment Securities LLC
(“BLMIS”). The Firm and certain of its subsidiaries also
entered into settlements with several private parties in
resolution of civil litigation relating to BLMIS. At the same
time, certain bank subsidiaries of the Firm consented to the
assessment of a civil money penalty by the OCC in
connection with various Bank Secrecy Act/Anti-Money
Laundering deficiencies, including with relation to the
BLMIS fraud, and JPMorgan Chase Bank, N.A. additionally
agreed to the assessment of a civil money penalty by the
Financial Crimes Enforcement Network for failure to detect
and adequately report suspicious transactions relating to
BLMIS. For further information on these settlements, see
Note 31 on pages 326–332 of this Annual Report.