Felix Salmon, Making sense of the JP Morgan settlement "As Eavis explains today, the settlement breaks down into three parts. $6 billion goes to compensate investors for losses on mortgage securities; $4 billion is relief for homeowners; and the remaining $3 billion in fines is specifically targeted only at actions which took place directly under Dimon’s watch."
"In other words, Parsons’ premise is exactly wrong: JPM is not paying penalties for mistakes made by Bear Stearns. All that it’s doing is making good on obligations of WaMu and Bear related to securities they sold. And it’s inherent in buying a bank that you become responsible for its liabilities as well as its assets."
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