A JPMorgan Chase & Co. employee is cooperating with federal investigators examining whether the bank knew the mortgage bonds it sold were of poor quality, Bloomberg News reported today. The unnamed JPMorgan employee told her superiors at the bank they were vastly overstating the quality of mortgages packaged into securities. The Justice Department also has documents showing JPMorgan was aware it was selling residential mortgage-backed securities of poor quality. The disclosure of a cooperator comes as the lender is in talks to pay about $11 billion to end investigations into its mortgage-bond sales practices by state and federal authorities.
