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Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Royal Bank of Scotland, UBS, and Wells Fargo are all being investigated by the Justice Department for the banks' mortgage-backed securities businesses prior to the financial crisis, the Financial Times reports. If JPMorgan's $13 billion settlement is any indication, these banks could end up paying some serious cash. The DOJ is, after all, using the JPMorgan case as a model to investigate other banks that contributed to the crisis. 

All of these investigations have been started by the mortgage fraud task force President Obama formed in January 2012. The force finally got some traction by landing the JPMorgan settlement, which JPMorgan CEO Jamie Dimon obviously struggled to agree to. The DOJ is still conducting a criminal investigation into the bank's mortgage-back securities business.

According to the Financial Times, these other investigations are primarily civil, aimed at filing lawsuits and procuring settlements. The investigations are spread among US attorneys' offices across the country. As we noted on Tuesday, the DOJ is planning to implement a 1980s law to prosecute the banks. The law "carries a relatively low burden of proof and gives prosecutors 10 years to pursue such cases, twice as long as under standard securities law." So the DOJ doesn't have to rush.

Crucially, the law requires that some settlement money be given to consumers. Average citizens who were negatively impacted by JPMorgan's mortgage-backed securities business, like Detroit homeowners, will receive $4 billion of the JPMorgan settlement. 

Neither the DOJ nor the banks being investigated have commented on the situation. 

This article is from the archive of our partner The Wire.

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