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Published Oct. 14, 2013

Only in the financial industry can a giant-size fraud be wiped away by writing a big enough check. A whopper settlement deal is in the works in which JPMorgan Chase would pay a record $11 billion or more to the Justice Department to end federal investigations into its behavior in the runup to the financial crisis. But if the settlement is to serve as a warning for the rest of the financial industry, it must include an admission of wrongdoing and hold open the possibility that individuals be held personally responsible.

A recent meeting between Jamie Dimon, JPMorgan's chief, and U.S. Attorney General Eric Holder demonstrates how spooked Wall Street gets when the government takes seriously its duty to enforce laws against misleading and cheating investors. Now the department should press its advantage, not just by jacking up the dollar figure but by requiring admissions by the firm and personal liability for some. The financiers on Wall Street got fabulously rich by packaging, rating and selling securities that many knew were worthless. It is infuriating that they have not been prosecuted.

JPMorgan is in the middle of a campaign to get out from under the crush of litigation and regulatory investigations. Just weeks ago the firm agreed to pay about $920 million in penalties to government regulators over its lack of internal oversight controls that led to $6.2 billion in "London Whale" trading losses last year. In that settlement it did admit wrongdoing. But the pattern in settlements between the government and banks involved in wrongdoing associated with the financial crisis has been a form of checkbook justice. Write a large check and buy yourself out of trouble. For instance, in 2010 Goldman Sachs paid $550 million to settle charges of materially misleading investors in the sale of mortgage-related securities. It admitted no wrongdoing.

An $11 billion settlement is significant, but it doesn't come close to making up for the financial damage caused by the sale of toxic mortgage securities. It is also unfair that the people who sold investments they allegedly knew were junk will escape with their millions intact. Government-imposed fines and penalties would come from the firm's shareholders and potentially taxpayers, since the payout could be tax-deductible.

If Holder wants his legacy to be something other than letting Wall Street off the hook, he will need to extract something beyond a big check. He cannot allow JPMorgan to walk away from its misdeeds without the kind of accountability that people who don't have billions of dollars at their disposal would face.