JPMorgan Chase and Credit Suisse have agreed to pay a combined $417 million to settle federal civil charges that they sold risky mortgage bonds to investors that the banks knew could fail ahead of the 2008 financial crisis.
JP Morgan did not warn investors that homeowners were behind on their payments for the mortgages tied to the bonds, the Securities and Exchange Commission said Friday. And both banks failed to properly disclose practices that allowed them to profit while investors lost millions, the SEC said.
When the real estate bubble burst, home values plunged and millions of people defaulted on their mortgages and lost their homes. Investors who bought the securities backed by mortgages lost billions.
Under the settlement announced Friday, New York-based JPMorgan is paying $296.9 million. Credit Suisse, based in Zurich, will pay $120 million.
Sandy, budget fears dent factory output
U.S. factory production of machinery and equipment fell sharply last month, held back by temporary disruptions caused by Superstorm Sandy and companies’ fears that a federal budget crisis could trigger a recession next year.
The Federal Reserve said Friday that factory output, the most important component of industrial production, fell 0.9 percent in October from September. It would have been unchanged without the storm, the Fed said.
Overall industrial production fell 0.4 percent last month. Utility output dipped 0.1 percent, while mining, which includes oil and gas production, rose 1.5 percent.
Ohio unemployment drops, below US rate
Ohio’s unemployment rate inched downward again in October, the state Department of Job and Family Services said Friday.
Seasonally adjusted joblessness in Ohio was 6.9 percent in October, down from the revised figure of 7.1 percent in September. That’s the lowest rate since August 2008, when it was 6.8 percent.
Ohio’s unemployment rate has remained below the national rate, which ticked up to 7.9 percent in October from 7.8 percent in September.
Department spokesman Benjamin Johnson said Ohio’s economic outlook has been steady.
IKEA issues apology for using forced labor
Swedish furniture giant IKEA expressed regret Friday that it benefited from the use of forced prison labor by some of its suppliers in Communist East Germany more than two decades ago.
The company released an independent report showing that East German prisoners, among them many political dissidents, were involved in the manufacture of goods supplied to IKEA between 25 and 30 years ago.
The report concluded that IKEA managers were aware of the possibility that prisoners were used in the manufacture of its products and took some measures to prevent it, but they were insufficient.
Nike sheds Cole Haan in $570 million deal
Nike is selling its Cole Haan brand to private equity firm Apax Partners for $570 million, part of its effort to focus on core brands.
The sneakers, clothing and sports gear maker said in May that it wanted to sell the leather shoe and bag division and its Umbro soccer jersey brand to cut costs.
Nike is focusing on its namesake brand, Jordan, Converse and Hurley.