JPMorgan Chase reports that its profits were up 53 percent in the fourth quarter of 2012 — but CEO Jamie Dimon's pay will be cut in half, after the bank lost billions of dollars on risky bets made in its London office. The incident tarnished the reputation of Dimon, who had successfully steered his bank through the recent financial crisis.
"This past year has been a bruising one for Dimon," as NPR's Steve Henn reports for our Newscast unit:
New York's attorney general has sued JPMorgan Chase, alleging that a unit now owned by the banking giant fraudulently sold mortgage-backed securities in the run-up to the 2008 financial crisis.
The civil lawsuit filed Monday by state Attorney General Eric Schneiderman is the first to be brought by the RMBS Working Group – the task force formed by President Obama in January to pursue alleged wrongdoing at the time of the financial crisis.
In simplified form: A bank takes deposits from savers, and pays them a low interest rate. Then it lends that money out to borrowers at a higher interest rate. The bank's profits come from the difference between the rates.