JP Morgan faced with $7.2 billion in legal fees

JPMorgan has been juggling multiple lawsuits, and the legal fees for the third quarter topped off at $7.2 billion, leading to a $400 million loss. CEO Jamie Dimon, who took over in 2004, said the loss was “painful,” and noted that the trend could continue for several more quarters. JPMorgan is currently negotiating with the Justice Department about a settlement for its pre-financial crisis sale of mortgage-backed securities. It is expected though that the Justice Department will charge a fine of at least $11 billion. Last month, the bank agreed to fines totaling $920 million in regards to the “London Whale” trading incident, and also last month was the $80 million JPMorgan had to pay for unfair credit card billing. But that’s just the start of it; JPMorgan is still facing at least three other lawsuits or investigations.
Dimon did add that the legal fees would not impact the bank’s ability to buy back stock or issue dividends, saying that JP Morgan “had strong underlying performance across the business.” The bank did see a quarterly profit of $1.42 per share, beating out forecasts by Wall Street.
JP Morgan Chase was also expected to have a weak showing this quarter because, on top of the legal issues, there has been a decrease in mortgage lending and bond trading. Their quarterly revenue was at $23.9 billion as opposed to last year’s $25.9 billion. Despite this, the bank created more fees by endorsing new stock and bond offerings, allowing for better results from the investment banking division.