What Should JP Morgan Have Done Differently In Order To Not Be Penalized?

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1. What should JP Morgan have done differently in order to not be penalized? (225-250 words)
When J.P Morgan swooped in and bought up Bear Sterns and Washington Mutual, they also bought up their legal troubles. Bear Sterns was heavily involved in the business of packaging and reselling subprime mortgage backed securities, while Washington Mutual was one of the most active retail mortgage lenders. Bear Sterns claimed to be performing due diligence to assure its mortgage packing was sound, but its implementation was flawed and improperly gave way to originators demands. Washington Mutual was also responsible for allowing a number of mortgage loans that didn’t conform to underwriting standards into the securitizations. These poorly vetted mortgages were offloaded to Fannie Mae and Freddie Mac then, by extension, to the American Taxpayers.
Jamie Dimon, President of J.P Morgan Chase, was well aware of the risks his company would take on by buying these firms. Having access to a highly trained and well paid legal team should have made him more cautious with his acquisitions.
If Jamie was set on acquiring one of these failing mortgage firms, then he and his company’s lawyers should have worked out a better deal with Federal …show more content…

In 2008, the justice department was more reluctant to pursue charges against big banks because the financial system was on the brink of collapse. But, time has passed and now they have more liberty to pursue justice. Now, federal officials like Treasury Secretary Hank Paulson and New York Fed President Tim Geithner, did encourage emergency acquisitions; In the case of the Bear Stern buyout, they even put up fed money to facilitate the transaction, but they never forced anyone into an acquisition. J.P Morgan had sufficient information regarding the legal turmoil surrounding these buyouts to reconsider their

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