JP Morgan Chase has agreed to a record $13bn settlement over mislabelled mortgage securities that federal and state authorities said stoked the financial crisis.

The Department of Justice announced the settlement on Tuesday, saying the bank "acknowledged it made serious misrepresentations to the public, including the investing public" over the quality of residential mortgage-backed securities it sold ahead of the financial crisis.

The deal includes $9bn in payments to investors and $4bn in relief to consumers, mainly homeowners, harmed by the conduct of JP Morgan Chase and the two failed banks it took over during the crisis, Bear Stearns and Washington Mutual.

The agreement resolves a major part of a series of complaints against the largest US bank over mortgage securities that investors incurred huge losses on.

Economist Richard Wolff told Al Jazeera that the settlement was a case of "too little too late."

"It sounds like a lot less than one half of the profit it earned last year, to make up for years of unethical or illegal activity," he said.

"To put this in perspective only $4bn will go to help so called struggling homeowners when about four million

people lost their homes.

"Big investors are taken care of most of the time with most of the money.

"How do you continue to justify a private banking system that is constantly exposed for doing illegal and unethical things?"

The settlement came after months of tough talks between regulators, justice authorities and the bank.

At one point at the end of September, when the Justice Department reportedly was hours away from suing the bank, chief executive Jamie Dimon met in Washington with Attorney General Eric Holder to keep the deal discussions going.

Al Jazeera's Tom Ackerman said the figure was far larger than JP Morgan Chase's opening offer.

"JP Morgan Chase's initial offer was $3bn," he said.

"Eventually they settled for $13bn, which gives you an indication of the concessions JP Morgan chase was willing to make."

The agreement announced on Tuesday clears most of the civil allegations over mortgage securities against the banks.

However, the Justice Department said the deal still does not absolve the bank or its employees from possible criminal charges.

"Through this $13bn resolution, we are demanding accountability and requiring remediation from those who helped create a financial storm that devastated millions of Americans," Associate Attorney General Tony West said in a statement.