How a Memo Cost Big Banks $37 Billion
Sunday, December 21, 2014 at 12:36PM Assistant U.S. Attorney Richard Elias was leafing through a pile of J.P. Morgan Chase & Co. documents while tending to his newborn son in 2012 when he found something that came back to haunt the three largest U.S. banks.
In a memo, one J.P. Morgan employee warned her bosses they were putting bad loans into securities being created before the financial crisis hit.
The U.S. attorney’s office in Sacramento, Calif., soon started sending subpoenas to J.P. Morgan officials tied to the memo. Three months later, top Justice Department officials in Washington told investigative teams across the country to hunt for similar ammunition in tens of millions of documents from other banks, especially Bank of America Corp. and Citigroup Inc.
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