New York State is set to receive $1 Billion after JPMorgan Chase & Co. agreed to pay $13 billion dollars in a landmark settlement for activities that prosecutors say were "symptomatic of the recklessness on Wall Street."
JPMorgan was among the major banks that sold mortgage-backed 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 1930's.
As part of the deal, JPMorgan has agreed to provide $4 billion in relief to homeowners affected by the bad loans. The bank also acknowledged that it misled investors about the quality of risky mortgage-backed securities.
The $13 billion settlement eclipses the record $4 billion levied on oil giant BP in January over the 2010 offshore oil spill, which was the worst in U.S. history.
In 2012, President Barack Obama picked New York Attorney General Eric Schneiderman to serve as a co-chair of the Residential Mortgage-Backed Securities Working Group. The group was tasked with investigating the role of residential mortgage-backed securities in the 2008 crash.
The AG’s office calls the agreement “the largest settlement with a single entity in American history.”
New York will receive more than $1 billion in the settlement, including $613 million in cash and approximately $400 million in consumer relief.