JPMorgan Chase will be charged tomorrow by federal prosecutors in California in connection with sales of mortgage-backed securities, a person familiar with the matter said.
The bank said last month in a regulatory filing that the U.S. Attorney's office in Sacramento had parallel civil and criminal investigations under way. Investigators have already concluded that it broke civil laws and were examining whether criminal laws were broken, according to the filing.
"In May 2013, the firm received a notice from Civil Division stating that it has preliminarily concluded that the firm violated certain federal securities laws in connection with its subprime and Alt-A residential MBS offerings during 2005 to 2007," the bank said in the filing.
Adora Andy, a spokeswoman for the U.S. Justice Department, declined to comment today on the federal probe.
Brian Marchiony, a spokesman for New York-based JPMorgan, declined to comment.
The person who said prosecutors will file charges asked not to be identified because the matter isn't public. The U.S. is investigating JPMorgan under the Financial Institutions Reform, Recovery and Enforcement Act, according to another person. FIRREA allows the Justice Department to pursue civil remedies.
Seeking to end probes of a $6.2 billion trading debacle, JPMorgan last week admitted to violating federal securities laws in a separate inquiry and agreed to pay about $920 million for failing to implement adequate controls and providing incomplete information to regulators and its board.