JPMorgan Employee Said to Be Cooperating in RMBS Probe

A JPMorgan Chase & Co. employee is cooperating with federal investigators examining whether the bank knew the mortgage bonds it sold were of poor quality, a person familiar with the probe said.

The JPMorgan employee told her superiors at the bank they were vastly overstating the quality of mortgages packaged into securities, according to the person, who asked not to be identified because the matter isn’t public. The Justice Department also has documents showing JPMorgan was aware it was selling residential mortgage-backed securities of poor quality, the person said.