The mega-investment bank JP Morgan Chase has been at the end of repeated bad news. It just reported its first quarterly loss in ten years. What was interesting is that this was largely due to the bank having to set aside $9.2 billion in lawyers’ fees, which gives you some idea of the extent of the charges of wrongdoing that it has to defend itself against.
Now comes another report that last Friday they have agreed to settle with the Justice Department civil charges over its questionable mortgage practices by paying $13 billion in fines. It is not clear whether the bank will be required to admit wrongdoing as part of the deal. This is important for any future prosecutions, both civil and criminal. According to NPR today, as part of the settlement they had hoped to be exempt from criminal penalties but the Justice Department had said no, no doubt because they had been getting a lot of heat for allowing the big banker criminals to avoid jail while prosecuting lower level people.
Jamie Dimon has for long been highly admired in Wall Street and been described as president Obama’s favorite banker. But surely shareholders will start to wonder if, even if he has been successful so far in making money at the expense of ordinary people, they want to leave the helm of the bank to someone who has incurred the largest fines in history.