Most expensive hush money bill? If it’s not, it most certainly is in the top 5.
A whistleblower whose evidence prompted one of America’s biggest banks to pay out $9billion to avoid federal prosecution has spoken out for the first time about her battle to reveal the truth.
Alayne Fleischmann was a lawyer with JP Morgan in 2006 who tried to alert her managers to the bank’s policy of re-selling sub-prime mortgages to investors without warning them of the danger.
The sale of toxic sub-prime loans – by JP Morgan and many other US banks – triggered the crisis in the US housing market that exploded into the global financial crisis of 2008, officials say.
The JP Morgan repackaged loans were sold to pension funds and other investment schemes who were unaware of the high risk of default attached to the products.
One loan investigated by Ms Fleischmann involved a manicurist who said she was earning $117,000 a year.
According to Ms Fleischmann, the manicurist would have had to work 488 days in a single year to earn that amount.
Yet, managers in JP Morgan were happy to include this loan in a low-risk package.
After witnessing a number of suspicious loans, Ms Fleischmann tried to alert senior officials in the bank about her concerns.