logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

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

  +Follow February 11, 2014 1:41PM
Share:
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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Signup for our daily newsletter and get our best articles emailed right to you!

Results for jpm
Douglas Kass
24 Oct 14 08:08:49
Why I shorted JPMorgan against my bank loans - in order to move back into market neutral in sector - coming up on RealMoneyPro. $JPM
Nico Starr
24 Oct 14 08:05:39
@petenajarian Oppenheimer raises targets on top money center bank picks. $BAC raised by $1 to $20. $C & $JPM raised by $3 to $67 & $72
sandeepdogra1995@yah
24 Oct 14 07:51:48
Thanks, Bank of America http://t.co/HqFJaWW7AW #video #funny #getmoneyout #ows #occupy #j17 $bac $c $gs $JPM
Investors Hangout
24 Oct 14 07:49:00
$CPE Short Sales Click Here: http://t.co/KbqiM9qQaS Also See: $DSCR $EFA $JPM $V ~
Stock Wire
24 Oct 14 07:42:26
The Dow Chemical Company Rating Reiterated by JPMorgan Chase & Co. (DOW) $JPM http://t.co/XtVseQb4OO
TradersRule 25/7
24 Oct 14 07:34:27
$JPM Inside bar on support. Yesterdays high within 1 cent of the 10/2 low. Momentum? Bias Flattens 1.17/1 Sellers http://t.co/PGRZiLIO85
Dividend Master
24 Oct 14 07:34:05
$JPM telling clients to ignore $AMZN Fire fiasco writedown & pretend that made numbers look a tad better
Carolyn B Miciano
24 Oct 14 07:29:59
Option Greeks are critical in Options trading http://t.co/RHx80Rp6au $JPM $BA $BAC
$Stocknewsalerts
24 Oct 14 07:15:49
$JPM New SEC Document(s) for JPMorgan Chase & Co. From our Stock News Alerts App
NASDAQ
24 Oct 14 07:13:14
$JPM - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/eXQzHBSUTf
Investors Hangout
24 Oct 14 06:40:30
$CENX % Change Click Here: http://t.co/bVqiGSudxW Also See: $GWPC $JPM $UNGS $TQQQ ~
Nico Starr
24 Oct 14 06:31:38
@jimcramer @SquawkStreet Oppenheimer raises target on top money center bank picks. $BAC raised by $1. $C and $JPM raised by $3
Nico Starr
24 Oct 14 06:31:26
@carlquintanilla Oppenheimer raises target on top money center bank picks. $BAC raised by $1. $C and $JPM raised by $3
wininstocks2014
24 Oct 14 06:30:51
JPM 58.06 Stock Charts $JPM JPMorgan Chase & Co. (NYSE) Last Updated: 10/24/2014 08:30:52 JPM Stock Chart - 1 http://t.co/Vcdw81sUms
Carolyn B Miciano
24 Oct 14 06:27:50
How to time your trades accurately http://t.co/HMFbp2pHhn $JPM $BA $BAC
Stock Forums
24 Oct 14 06:17:53
$CDE Investor Opinions Click Here: http://t.co/nY4Is98KY7 Also See: $JPM $SLTD $IYR $TRN ~
Carolyn B Miciano
24 Oct 14 06:11:39
Guide to put call parity in Options http://t.co/cx5X9QdbWJ $JPM $BA $BAC
Stock Forums
24 Oct 14 06:08:32
$CAT Day High Click Here: http://t.co/oUUTNIU7L5 Also See: $AMBA $JPM $BAC $TRTC ~
Carolyn B Miciano
24 Oct 14 05:44:18
Use technical analysis to time entries and exits http://t.co/eZhMIhbeaR $JPM $BA $BAC
Carolyn B Miciano
24 Oct 14 05:10:19
Using ThinkBack for testing http://t.co/ttmGhHF7L4 $JPM $BA $BAC
Nico Starr
24 Oct 14 04:41:18
@murphyrosecliff Oppenheimer raises target on top money center bank picks. $BAC raised by $1. $C and $JPM raised by $3
Nico Starr
24 Oct 14 04:41:03
@Stephanie_Link Oppenheimer raises target on top money center bank picks. $BAC raised by $1. $C and $JPM raised by $3
Pierce Crosby
24 Oct 14 04:37:09
What's the diff between a hedge fund and a mutual fund? Well, not these positions at least. $AMZN $FB $CMCSA $JPM http://t.co/miDNkzRzGf
Carolyn B Miciano
24 Oct 14 04:36:52
Secrets of the Bond market http://t.co/7C18KlmoXr $JPM $BA $BAC
Bidness Etc
24 Oct 14 04:31:06
JPMorgan have issued warnings over its controversial hiring activities in China- http://t.co/7WDQKxZuLh $JPM
ronin245
24 Oct 14 04:07:05
$P an $JPM just gave this $42 target 7/25 along with $YELP $95, who are these bull crazy anaylysts working for JPM now?
avi.bera@gmail.com
24 Oct 14 03:40:42
How to make 120,000 chase miles in 6 months. http://t.co/6mgqH3WfrK $jpm #frequentflyer #mileageplus #creditcards
Stock Wire
24 Oct 14 03:38:54
JP Morgan Was Aware Of Controversial Hiring Practices In China Before Probe $JPM http://t.co/FXFfhwIEWo
Carolyn B Miciano
24 Oct 14 03:29:16
Don\'t take earnings trades without watching this http://t.co/BAYNNm2W0P $JPM $BA $BAC
$Stocknewsalerts
24 Oct 14 03:16:20
$JPM New SEC Document(s) for JPMorgan Chase & Co. From our Stock News Alerts App
NASDAQ
24 Oct 14 03:09:19
$JPM - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/J34s32rXip
NASDAQ
24 Oct 14 03:09:18
$JPM - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/41pufCqKQX
4-traders.com
24 Oct 14 02:55:12
JPMorgan Chase : Search for the UK's Most Inspirational Philanthropists http://t.co/G5G0N4a0i0 $JPM
4-traders.com
24 Oct 14 02:55:05
JPMorgan Chase : AFC Secures $100 Million OPIC and JP Morgan Loan http://t.co/0k9c7W7a3j $JPM
4-traders.com
24 Oct 14 02:55:03
JPMorgan Chase : AFC Secures U.S.$100 Million OPIC, JP Morgan Loan http://t.co/rzBnSuJFNh $JPM
ronin245
24 Oct 14 02:42:12
$YELP who's this analyst @ $JPM that keeps pumping this cr@p? $C $JEF $DB they sure won't quit, can we have a collective "Yelp Sucks" ?
KC
24 Oct 14 02:16:06
@Smaulgld hey, eventually you gotta show up with da metal; we are at "eventually" now. too bad, $JPM. $gold $silver
Stock Wire
24 Oct 14 01:35:15
The New York Fed Failed To Examine The JPMorgan “London Whale” Case $JPM http://t.co/FFOJJhF1dU
Stock Wire
24 Oct 14 01:35:14
JPMorgan Chase & Co. Boosts Anglo American plc Price Target to GBX 1310 ... $JPM http://t.co/WMaWuFueWn
Stock Wire
24 Oct 14 00:59:02
RPM International Receives "Neutral" Rating from JPMorgan Chase & Co. (RPM) $JPM http://t.co/kze6YV6oG2
Chasing Stars
24 Oct 14 00:38:07
$SWRF 52Wk Low Click Here: http://t.co/vpbfWCG5xo Also See: $JPM $SVXY $USO $GS ~
Aman19380@gmail.com
24 Oct 14 00:16:25
How to make 120,000 chase miles in 6 months. http://t.co/40yo0rvbL1 $jpm #frequentflyer #mileageplus #creditcards
The American
23 Oct 14 23:58:17
$BANK Lenders Snooze While Treasury Yields Jump 0.06%-0.13%This Week http://t.co/NaAr8hA7Mq via@SA $OCN $WAC $JPM $BAC $WFC $C $USB $BBT $BK
Nations Branch
23 Oct 14 23:21:31
RT @SeekingAlpha: Mortgage Lenders Snooze While Treasury Yields Jump 0.06% To 0.13% This Week http://t.co/oVeXHAHrgf $AGNC $BAC $BBT $C $CB…
Justin Calhoun
23 Oct 14 23:00:32
RT @SeekingAlpha: Mortgage Lenders Snooze While Treasury Yields Jump 0.06% To 0.13% This Week http://t.co/oVeXHAHrgf $AGNC $BAC $BBT $C $CB…
FrontierMetrix
23 Oct 14 22:59:54
RT @SeekingAlpha: Mortgage Lenders Snooze While Treasury Yields Jump 0.06% To 0.13% This Week http://t.co/oVeXHAHrgf $AGNC $BAC $BBT $C $CB…
Quantpost Financial
23 Oct 14 22:40:18
$BAC $C $JPM News: "Mortgage Lenders Snooze While Treasury Yields Jump 0.06% To…" http://t.co/wf49cWQi1U Board view: https://t.co/b7kjMIa5HO
Seeking Alpha
23 Oct 14 22:40:16
Mortgage Lenders Snooze While Treasury Yields Jump 0.06% To 0.13% This Week http://t.co/oVeXHAHrgf $AGNC $BAC $BBT $C $CBG $JPM $KEY
4-traders.com
23 Oct 14 22:35:08
JPMorgan Chase : CCB 3Q decline in line with expectations - JPM http://t.co/icYW6b2eiq $JPM $601939
DailyStockPicks
23 Oct 14 22:17:25
During this #Ebola outbreak, $JPM investors will also want to buy $SMED. They handle medical and hazardous waste http://t.co/vTV3wPBONo
				
				
  +Follow February 11, 2014 1:41PM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.