JPMorgan sets aside an additional $684 million for lawsuits
JPMorgan Chase & Co., bracing for higher legal costs, set aside an additional $684 million in the third quarter for litigation expenses.
Jamie Dimon, the bank’s chairman and chief executive, declined to specify what led the bank to up its litigation reserves.
“Obviously we’re in a litigious society,” Dimon said in a conference call with reporters Friday morning. “We’ve got a lot of mortgage suits coming, and others.”
“We expect some litigation expenses going forward but hopefully it’ll come down over time,” he added. “But we can’t promise you that.”
The disclosure of the pre-tax expense, reported as the bank posted a 34% jump in third-quarter profits Friday, comes a week after New York Atty. Gen. Eric Schneiderman hit JPMorgan with a lawsuit.
The suit, brought as the first major action by a federal task force aimed at mortgage fraud and its role in the financial crisis, relates to mortgage bonds sold by Bear Stearns, the investment bank JPMorgan purchased when it ran into trouble during the financial crisis.
Dimon, in a conference call with analysts, criticized Schneiderman’s lawsuit.
“It’s going to make it much harder in the future for companies to buy a troubled company,” Dimon said.
Earlier this week, Dimon reportedly said JPMorgan did the government “a favor” in buying Bear Stearns. The firm was sold at a fire-sale price of $2 a share, backed with government guarantees.
Wells Fargo this week got hit with a mortgage-fraud lawsuit brought by the U.S. Department of Justice seeking hundreds of millions of dollars. The suit involves Wells Fargo loans insured by the government’s Federal Housing Administration. Wells has denied the suit’s allegations.
Asked about whether JPMorgan has had talks with the Justice Department on such issues, Dimon suggested he expected more actions against banks, though he didn’t specify.
“I would expect that when these things come out everybody’s going to have something of the same order,” Dimon said, adding that JPMorgan wasn’t “very big in FHA” loans.
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