JPMorgan Chase & Co. (NYSE:JPM) has announced the settlement of its dispute with the Federal Deposit Insurance Corp (FDIC) for the acquisition of Washington Mutual (WaMu), in which JPMorgan expects to receive $645 million.

The settlement involves the sale of WaMu’s banking operations to FDIC during the financial crisis in 2008. A regulatory filing revealed that JPMorgan should receive $645 million for the sale of the banking operation for which FDIC is the receiver. JPMorgan stated that it will drop claims valued at more than $1 billion relating to the WaMu purchase in exchange for the settlement.

According to the US bank, Deutsche Bank will oversee 99 residential mortgage security trusts as part of its trustee role. The result is that Deutsche bank will have a claim against the estate. JPMorgan’s argument was that it should not be held liable for the various lawsuits that it has faced due to WaMu actions. A lawsuit was filed against FDIC in 2013 accusing the organization of failing to honor its massive indemnification responsibilities. FDIC officials countered with a claim that JPMorgan assumed the legal responsibilities of WaMu as part of the acquisition and that it had no claim over the assets worth $2.7 billion that were still under receivership.

The new settlement between the firms means that JPMorgan will no longer pursue the claims and will instead accept the $645 million as the settlement. The banking firm is currently the biggest bank in the US by assets. Its chairman and CEO Jamie Dimon stated that he anticipated massive legal costs from the settlement and that he would have settled for a much lower price. This means that he felt that the value of the settlement was a good deal for his firm.

JPMorgan’s lawsuit against FDIC comes a few weeks after the firm agreed to a landmark settlement of $13 billion with the US Department of Justice and a few other agencies for wrongly selling the mortgaged securities. A judge overseeing the case stated in June that JPMorgan was only responsible for WaMu’s liabilities in the books as per the day of the acquisition.

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Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg,,, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.