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What if JPMorgan Has to Pay More than $13 Billion to DOJ?

  +Follow February 11, 2014 1:41PM
Tickers Mentioned:

The myriad legal settlements paid out by investment banker JP Morgan Chase and Co. (JPM) have consistently filled financial news headlines for some time now. Not just for the scope of the company’s malfeasances, but for the sheer size of the payouts — a few hundred million here, a couple billion there, and $27 billion by the time the dust had settled.

What is often lost in all the talk of JP Morgan’s monstrous government settlements is how they didn’t really affect the bank’s profits. JP Morgan factored in the expected losses and set aside a giant wear chest for settlements prior to their maturation. The market in turn looked past the payouts to JPMorgan’s bottom line, and liked what it saw.

Indeed, despite the size of the payouts JP Morgan remained solidly in the black three out of four quarters of 2013. The banking giant outpaced the S&P 500’s already robust return, notching a 30.94 percent gain in stock price over the year versus a 29.6 percent uptick for the famous index.

The company’s investors breathed a sigh of relief after the largest of the payouts closed late last year: the one due to the Department of Justice over knowingly selling toxic mortgage securities during the Great Recession. After initially throwing out $3 billion, JP Morgan finally settled to the tune of $13 billion. While sizable, it still fit within JPMorgan’s settlement budget, and business resumed as normal.

However, the size, scope, and lack of oversight concerning what became the largest government settlement in history are all facing closer scrutiny in light of a lawsuit filed by a government watchdog group. And if the lawsuit were to prove fruitful, JP Morgan could be on the hook for a settlement they might not so easily absorb.

The watchdog group in question, Better Markets, asserts that the DOJ violated the separation clause of the Constitution when they approved the $13 billion settlement unilaterally. In the lawsuit, Better Markets states that “This (settlement agreement) was the product of negotiations conducted entirely in secret behind closed doors… No one other than those involved in those secret negotiations has any idea what JP Morgan Chase really did or got for its $13 billion because there was no judicial review or proceeding at all regarding this historic and unprecedented settlement.”

If the lawsuit is found to have merit, it could not only ratchet up JPMorgan’s government tab considerably, but change to precedent for other major banks still due to shell out their own settlements, notably Bank of America (BAC) , who are still on hold for their own rumored $8.5 billion payout.

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Results for jpm
Brad Skillman
30 Nov 15 08:02:14
RT @JCMcCracken: Hitting @BloombergRadio at 11 am w/ $GS and then $JPM to discuss huge yr in M&A.
Breaking News Now
30 Nov 15 08:00:01
$JPM: New SEC Filing for JPM: Form 424B2 (No. 0000891092-15-010297): https://t.co/CjQmXXJpQL
New SEC Filings
30 Nov 15 07:59:24
NEW SEC Filing for $JPM filed a moment ago: https://t.co/EhD5PRqhG9 https://t.co/nNteWrTses
Bloomberg Deals
30 Nov 15 07:57:38
RT @JCMcCracken: Hitting @BloombergRadio at 11 am w/ $GS and then $JPM to discuss huge yr in M&A.
Jeffrey C. McCracken
30 Nov 15 07:53:48
Hitting @BloombergRadio at 11 am w/ $GS and then $JPM to discuss huge yr in M&A.
30 Nov 15 07:42:48
Trading indices? Check stories for the major constituents of #SP500 $CVX $PG $JPM https://t.co/Rwpf6Sogpu https://t.co/p68cdcKa9p
Marcello Scarlato
30 Nov 15 07:38:20
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30 Nov 15 07:37:02
$JPM: Barclays Investment Bank Should Brace for Cuts, Investec Says: https://t.co/CHWwE4t5xL
30 Nov 15 07:30:54
long $JPM DEC 70's @ .26
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30 Nov 15 07:13:12
$JPM:US JPMorgan Leaves Bonus Pool for Traders, Bankers Unchanged #JPMORGAN CHASE & CO https://t.co/HPdw7RxCJf #SP500
China Invest
30 Nov 15 07:08:04
RT SeekingAlpha: What To Consider Before Adding A Bank To Your Portfolio For 2016 https://t.co/Cl6jWDT58X $BBT $FITB $GS $HBAN $JPM $PNC $…
Dan Hecht
30 Nov 15 07:04:48
$JPM and $FRC treating me fairly well :)
Jason Olive
30 Nov 15 07:03:43
RT @SeekingAlpha: What To Consider Before Adding A Bank To Your Portfolio For 2016 https://t.co/mhOSFvZiiA $BBT $FITB $GS $HBAN $JPM $PNC $…
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30 Nov 15 07:01:43
Wall Street Breakfast: Yuan Poised For Reserve Status https://t.co/VSpMk4hrd9 $SPY $QQQ $AMZN $BBRY $CCGGY $DLAKY $HEINY $JPM $SBMRY
David Duran
30 Nov 15 07:01:10
RT @SeekingAlpha: What To Consider Before Adding A Bank To Your Portfolio For 2016 https://t.co/mhOSFvZiiA $BBT $FITB $GS $HBAN $JPM $PNC $…
30 Nov 15 06:59:59
sentishiftup $AGN $XLY $BBRY $SALE $JPM #FinTech #FinServ https://t.co/NKDRUaTly8 20151130-10:00
Quantpost $JPM
30 Nov 15 06:56:17
$JPM News: "What To Consider Before Adding A Bank To Your Portfolio For 2016…" https://t.co/vIETpm1oJk Analyze: https://t.co/ToOkuna9bQ
Financial Stocks
30 Nov 15 06:56:17
What To Consider Before Adding A Bank To Your Portfolio For 2016 https://t.co/gTmLH3dv7K $BBT $FITB $GS $HBAN $JPM $PNC $BAC
Seeking Alpha
30 Nov 15 06:56:17
What To Consider Before Adding A Bank To Your Portfolio For 2016 https://t.co/mhOSFvZiiA $BBT $FITB $GS $HBAN $JPM $PNC $BAC
30 Nov 15 06:54:03
$JPM: Stocks Highlights :JPMorgan Chase & Co. (NYSE:JPM), Under …: https://t.co/TKCG8IaKJf
Breaking News
30 Nov 15 06:52:10
$JPM: JPMorgan Keeps Traders Bonus Pool Unchanged from 2014: https://t.co/LRI8DZhTb4
30 Nov 15 06:49:40
UVXY ProShares Ultra VIX Short-Term Futures ETF Bid Size https://t.co/U4oygtPVMH $UVXY $JPM $TQQQ $TQQQ #UVXY #tradeideas #invest
John Richardson
30 Nov 15 06:46:49
Close Long 149Shares of $JPM at 67.37 & Short 228Shares of $STI at 43.65 PnL: https://t.co/ecWT5kngim
Open Outcrier
30 Nov 15 06:42:28
Fins up to highs $JPM $C
Bidness Etc
30 Nov 15 06:42:21
JPMorgan Chase & Co Outperforms Rivals - https://t.co/2GLHx6iG6n - $JPM https://t.co/lg7rKzX5P8
30 Nov 15 06:42:18
JPM J.P. Morgan Chase & Co. Stock Forum https://t.co/uPz9MlsmHh $JPM $GE $TVIX $TITXF #JPM #invest #investing
John Richardson
30 Nov 15 06:37:43
Open Long 133Shares of $NTRS at 75.33 & Short 148Shares of $JPM at https://t.co/mKJ8RgASV9
30 Nov 15 06:37:08
DGLY Digital Ally Inc. E.P.S. https://t.co/b5kqyGjRGf $DGLY $PCLN $NOC $JPM #DGLY #invest #share
Investors Hangout
30 Nov 15 06:34:07
AVGO Avago Technologies Ltd. Chart https://t.co/KiBTAOBWWO $AVGO $JPM $NOC $JPM #AVGO #investing #stock
30 Nov 15 06:33:03
AEZS AEterna Zentaris Inc. Ask Size https://t.co/KPAGS1vs2M $AEZS $JPM $RPRX $VXX #AEZS #invest #finance
30 Nov 15 06:24:57
sentishiftup $XLY $BBRY $JPM $SALE $HZNP #FinTech #FinServ https://t.co/NKDRUaTly8 20151130-09:25
30 Nov 15 06:22:37
$SALE breakout on #BlackFriday up 5% target $15. 6 EV/EBITDA, $60M stock buyback plan in Q4 https://t.co/qM8kTQpx0i $JPM $BIIB $WMB
30 Nov 15 06:17:16
$WFC $MS $JPM $GS $C $BAC: U.S. Moves Toward Setting Up Yuan Trading and Clearing in America: https://t.co/uYolfHNYDg
Breaking News
30 Nov 15 06:15:02
$CSCO $JPM: Sizzling Stock Alert: Cisco Systems, (NASDAQ:CSCO), JPMorgan …: https://t.co/3tFMuSkRFF
30 Nov 15 06:04:53
Today's Potential Rally $GSY $PFF $PGF $CBON $JPM $GS $C $BAC $USDU $NUSFX $CWB $CRM $WDAY $TNA ATM PUTs on $CYB https://t.co/QGZreRescS
Michael Cook
30 Nov 15 05:59:08
3,500% Gains On Stock Picks In 5 Months And An Amazing New Pick Is On The Way! Get It Early: https://t.co/GCmBVIIC8f $LVS $JPM $MHYS
Paul Henry
30 Nov 15 05:58:14
$MHRC has now gained 756.25% In The Past 2 Weeks! Huge News: https://t.co/fKslN0dN7c $LVS $JPM $MHYS
Michael James
30 Nov 15 05:58:07
$MHRC Has Nearly QUADRUPLED In Value, In The Past 2 Weeks! Special Update: https://t.co/ohkeyaXpyZ $LVS $JPM $MHYS
Stock Forums
30 Nov 15 05:42:34
MYEC MyECheck, Inc. Shares https://t.co/mixBKeAXyv $MYEC $IEF $JPM $GBSN #MYEC #stock #finance
30 Nov 15 05:42:22
JPM J.P. Morgan Chase & Co. Tick https://t.co/eCwqdXni9L $JPM $MU $FB $WMT #JPM #pennystocks #nasdaq
John C
30 Nov 15 05:42:20
JPMorgan leaves bonus pool unchanged $JPM https://t.co/u7jjVUbHdC
30 Nov 15 05:39:34
GREK Global X FTSE Greece 20 ETF E.P.S. https://t.co/fjS2HXNZrg $GREK $AAPL $UGA $JPM #GREK #tradeideas #share
30 Nov 15 05:39:06
GOOGL Alphabet Inc. EOD Data https://t.co/AlYvgKAYHG $GOOGL $JJC $UGAZ $JPM #GOOGL #pennystocks #stockmarket
30 Nov 15 05:37:33
FEYE FireEye Inc. P/E Ratio https://t.co/Uuk3Di2BNW $FEYE $RPRX $LULU $JPM #FEYE #pennystocks #finance
Breaking News Now
30 Nov 15 05:37:14
$GS $C $JPM $DB: Oil Plunge Raises Fears of Societal Unrest: https://t.co/TzOzmkq0pe
Trending Articles SA
30 Nov 15 05:30:05
Wall Street Breakfast: Yuan Poised For Reserve Status https://t.co/JXujBW3tQn $SPY $QQQ $AMZN $BBRY $CCGGY $DLAKY $HEINY $JPM $SBMRY
Sweet Platform
30 Nov 15 05:26:53
JPM Top news - Nov 30th, 2015 $JPM https://t.co/tJOT7J7GMM
30 Nov 15 05:25:03
RT @bobbyw24: Watch Out, Visa and MasterCard; Here Comes #Blockchain $V $MA $AXP $DFS $PYPL$BK $JPM https://t.co/hO4L1LbENQ via @barronso…
30 Nov 15 05:24:13
Wall Street Breakfast: Yuan Poised For Reserve Status https://t.co/vcgcMRVmeq $SPY $QQQ $AMZN $BBRY $CCGGY $DLAKY $HEINY $JPM $SBMRY
30 Nov 15 05:22:11
$JPM $C: Citigroup Sees Slow Leveraged-Loan Growth Stunting European …: https://t.co/S615bOOV23
  +Follow February 11, 2014 1:41PM



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