JPMorgan also disclosed that it recently received two "Wells" notices from the Securities and Exchange Commission related to its mortgage business. One of the Wells notices had to do with the disclosures that JPMorgan made when selling two mortgage-related bonds. The second Wells notice relates to the way in which Bear Stearns settled claims against originators related to loans included in bonds that the investment bank, which was acquired by JPMorgan in mid-2008, sold to investors. It has been reported that Bear bankers regularly got loan brokers to repay them for delinquent loans, but then did not pass those payments on to the investors who eventually bought those loans. Wells notices indicate that the staff of the SEC has determined that a securities law violation has occurred and that charges should be brought.
