[Photo: Jes Staley, by Bloomberg News]

In 2013, when the U.S. was seeking a record-breaking payment from JPMorgan Chase for the sale of toxic mortgage-backed securities (MBS's), Jamie Dimon went to Washington and quickly worked out a $13 billion settlement.  Jes Staley, 59, who spent more than 3 decades at JPMorgan and was once seen as a candidate to succeed Dimon, is taking a more combative approach at Barclays. Of course, it should be appreciated that the circumstances and context of the negotiations in 2013 varied markedly from those in 2016.

That said, CEO Staley decided to hold the line in settlement negotiations, and the Department of Justice proceeded to sue Barclays on Thursday. Prosecutors charge Barclays with repeatedly deceiving investors while selling $31 billion of MBS’s a decade ago, before the housing bubble popped. The bank counters by saying the government’s accusations are “disconnected from the facts.”

The threat of a multibillion-dollar settlement …  has hung over Staley’s head since he took over as CEO of Barclays last year, overshadowing his efforts to shrink the bank and refocus on its core markets in the U.K. and U.S. Over the past 5 years, almost all its profit has been erased by $24.5 billion of misconduct charges.

While talks with the government went poorly from the start, the DOJ ultimately reduced its demand to about $5 billion. But Barclays reportedly refused to pay more than about $2 billion. On Thursday, Staley made the decision that bridging the gap would be impossible.

Staley’s decision to fight may have been tempered, in part, by several other factors:

• Ex-Barclays CEO Robert Diamond cooperated with regulatory investigations into the rigging of benchmark interest rates in 2012. Despite praise for being the first bank to settle, Diamond was eventually vilified and forced to resign amid a public outcry.
• In May 2016, an appeals court ruled against the U.S. in its case against Bank of America – the court threw out a $1.3Bn judgment against BofA for selling defective mortgage loans, ruling the government hadn’t shown “fraudulent intent.”
• The Justice Department may be more willing to bend as it tries to finish prosecutions from the Obama era, or Barclays can possibly get a better deal after Trump takes office.

Barclays has hired an additional law firm, Williams & Connolly, to represent it in court.