The scandal-riddled investment bank JP Morgan Chase and Co. (JPM) is nearing a $13 billion settlement with government officials over the sale of toxic mortgage bonds, which if closed will wipe the slate clean on a tumultuous year the bank would certainly like to forget.
JP Morgan has been implicated in a variety of ethically dubious actions this year, from price fixing to bribing Chinese regulators, and continual fallout from the London Whale trading fiasco and the banks ties to the infamous Bernie Madoff.
Settling those issues though was small peanuts compared to the toxic mortgage probe which haunted the bank, and contributed to the company posting the most disappointing earnings report in years last quarter.
Despite the fact that a $13 billion settlement with the Department of Justice and Federal Housing Finance Agency would be the largest paid by a private sector company to the government ever, JP Morgan has made preparations, and is expected to weather the payout just fine. The bank set aside some $28 billion to settle claims this year.
Now that the worst for the bank appears to be over, JP Morgan is making efforts to distance itself from its troubled past. The bank recently removed CEO Jamie Dimon from his position as Chairman of the board. JP Morgan is also looking to sell their commodities trading desk and with it their controversial commodities exec Blythe Masters, who is often credited with devising the CDOs that contributed heavily to the global financial meltdown in 2008.
In a testament to the company’s resilience, despite the barrage of legal difficulties JP Morgan has had a perfectly fine year, with its stock gaining 24.81 on the year to hit $52.62 a share.
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. To read our full disclosure, please go to: http://www.equities.com/disclaimer