This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.


And I'm Melissa Block. The government this week finalized a $13 billion settlement with JPMorgan Chase over shoddy mortgage assets. The deal resolves a series of state and federal civil investigations against the bank. But like other big settlements to emerge from the mortgage mess, no one admits they've done anything wrong. Here's NPR's Jim Zarroli.

JIM ZARROLI, BYLINE: State and federal regulators hailed the JPMorgan settlement as a big victory for the judicial system. The government alleged that the bank and two other financial institutions it later acquired were repeatedly warned about the low quality of the assets it sold but never did anything about them. Associate U.S. Attorney Tony West(ph).

TONY WEST: The conduct JPMorgan has acknowledged, which is packaging risky home loans into securities, then selling them without disclosing their low quality to investors, that is behavior that we believe contributed to the wreckage of the financial crisis.

ZARROLI: The government spelled out its case in a statement of facts that JPMorgan agreed to sign, but even as the bank was acknowledging its conduct, it was also proclaiming its innocence. Here was Chief Financial Officer Marianne Lake in a conference call Tuesday.

MARIANNE LAKE: The firm has not admitted to any violations of the law.

ZARROLI: Lake and CEO Jamie Dimon repeated that several times: no violations of the law. At the same time, the bank signed an agreement that U.S. officials say suggests a pattern of misleading investors. So who's right?

JACOB FRANKEL: We're in an age of spin, and I think the answer is everybody is right.

ZARROLI: Securities lawyer Jacob Frankel says the statement of facts at the heart of the case is artfully worded so that both sides can walk away claiming a victory of sorts. JPMorgan Chase, for instance, gets to settle the case and move on, but it doesn't admit anything that might come back to haunt it later on in one of the private lawsuits it faces, for example.

FRANKEL: This language really was crafted very carefully to ensure that the closure of these cases could not then be used in some other proceeding in a way that actually becomes a sword with which to stab JPMorgan yet again.

ZARROLI: But there's plenty of the statement of facts to hint at some degree of misconduct by the bank. Jimmy Garoule(ph) is a former Justice Department official who now teaches at Notre Dame Law School. Garoule points to one example in which a bank official warned about the poor quality of one of the underlying mortgages in a security sold by the bank. Her warnings the statement says, were disregarded, and Garoule says there are lots of examples like that.

JIMMY GAROULE: It's a consistent pattern that demonstrates that high-level officials at JPMorgan had knowledge that the loans that they were pulling together and selling were high risk. And there were likely to be substantial defaults.

ZARROLI: But juries are unpredictable, and it's not clear whether this evidence would've held up in a court trial. Justice Department officials clearly decided not to take the chance, and weighing heavily in their calculation was another big factor. Garoule points out that the government also walked away with a huge amount of money. The record settlement generated plenty of headlines and, to the public at least, it undermines the bank's claims of innocence.

GAROULE: It's absurd for JPMorgan to suggest that it didn't engage in any criminal wrongdoing but yet agreed to pay the Department of Justice $13 billion.

ZARROLI: But the financial penalty isn't quite as costly as it appears for the bank. For one thing, much of it is tax deductible. The settlement also comes at a time of mounting criticism about deals like this, deals that allow financial institutions to dispose of allegations without admitting wrongdoing.

The new head of the Securities and Exchange Commission says she wants to avoid such deals when possible, but this week's settlement suggests they're probably not going away anytime soon. Jim Zarroli, NPR News, New York

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