In a presentation at the Barclays Global Financial Services Conference, JPMorgan Chief Financial Officer Marianne Lake said that the bank “expect[s] to add to litigation reserves in the quarter, which will more than offset the $1.5 billion or so of consumer reserve releases.” Although Lake did not specify which legal costs she was referring to, she said that the reserve addition “covers a number of different matters, some of which you’ve been reading about” and that there “has been a crescendo of activity in past weeks.”
In August, when JPMorgan reported $6.5 billion in net income for the second quarter, the bank also announced it was tacking on $600 million to its litigation reserves and raised its estimate of possible losses in addition to its reserves to $6.8 billion. Since then, JPMorgan’s legal woes have only increased, with the bank now facing some 43 lawsuits, including one from the housing regulator Federal Housing Finance Agency who is reportedly seeking at least $6 billion in a settlement. In addition, Reuters reported last week that the FBI and federal prosecutors are conducting a criminal investigation into whether JPMorgan traders obstructed an investigation into the company’s energy trading practices that ultimately resulted in a $410 million fine from the Federal Energy Regulatory Commission, but no admission of wrongdoing from the bank.
When asked whether legal costs would increase or begin to taper off in the next year, Lake said she would not be able to give “full cost and litigation expenses” because it’s “not that straightforward” and that the costs “can be very lumpy and… evolve not only within years, [but] in quarter and within week.”
- Tunisia's president declared a state of emergency a week after a deadly terror attack on a beach hotel.
- Some 150 migrants stranded in the French city of Calais stormed the Channel Tunnel in an attempt to make it to British territory.
- One person was killed and two others were seriously injured Friday when an air medical transport helicopter crashed in Colorado.