J.P. Morgan Fines and Settlements Getting Too Big to Ignore: Earnings and C-Suite Woes Next?

24/7 Wall St.

J.P. Morgan Chase & Co. (JPM) seems to be entering a no-win scenario when it comes to finances and regulators. The billions upon billions of dollars in fines, settlements, regulatory fees and the like really are adding up. At some point it will be so much money that even Jamie Dimon cannot ignore it.

Investors have to hope that this current wave of charges, fines and settlements is the crescendo. Unfortunately, that may not be the case. It seems that when the bank makes one settlement, another jurisdiction or body then wants more money too and fresh charges or lawsuits are filed against J.P. Morgan Chase.

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24/7 Wall St. has looked through the tally of settlement announcements and fines that have been made in recent weeks. We also took a look at the regulatory and civil actions as well. If Jamie Dimon was Captain Kirk in an episode of Star Trek, this would be turning into the ultimate no-win scenario. The numbers are getting so large that at some point we would begin to worry about how this could impact the bank's current and future earnings. Investors might even have to start wondering if another wave of management and key people will turn over.

We ran a poll back in August that simply asked, "Is there a breakup conspiracy against J.P. Morgan Chase?" pertaining of course to the government and to regulators. We had only a very disappointing 64 responses, but 67% of those responses answered yes to that question.

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Jamie Dimon and his team already have taken somewhere around $18 billion in litigation expenses over the past three and a half years or so. We wonder if at some point Jamie Dimon will throw in the towel. That would be no joking matter because the banking giant is considered to be "top-light" when it comes to seasoned executives who could run the bank if Dimon suddenly left his role as chief executive officer and chairman.

These have been just some of the media headlines in the past eight weeks or so on the matters at hand:

  • J.P. Morgan in Talks to Pay Up to $11 Billion to Settle Mortgage-Backed Securities Probes (Dow Jones 9/25)
  • JPMorgan's Mortgage Settlement May Reach $20 Billion (Zero Hedge 9/24)
  • Mass. Attorney General Investigating J.P. Morgan Chase's Debt-Collection Practices (Dow Jones 9/20)
  • Morgan Chase Reaches $389 Million Settlement with Regulators on Credit Cards (Dow Jones 9/19)
  • J.P. Morgan Agrees to Pay $920 Million Fine Tied to "London Whale" Fiasco (Dow Jones 9/19)
  • Civil Settlement Does Not End JPMorgan's "Whale" Troubles (American Banking 9/17)
  • JPMorgan In $300 Million Settlement Over Force-placed Insurance (American Banking 9/09)
  • FHFA Seeks $6 Billion Mortgage Settlement with JPMorgan Chase (National Mortgage News 8/28)
  • DOJ Launches Probe of J.P. Morgan Chase Energy Business (Dow Jones 8/19)
  • J.P. Morgan Will Pay $410 Million to Settle Electricity Market Case (Dow Jones 7/30)

Note that we intentionally left off the smaller settlement cases and charges. Those in the double-digit millions and hundreds of thousands were simply too many and too small, when you compare them to the ones we cited above.

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Shares of J.P. Morgan Chase & Co. closed up about 2.7% at $51.70 on Wednesday, against a 52-week range of $38.83 to $56.93. Its market cap is $194 billion and the bank's total assets were more than $2.4 trillion.

J.P. Morgan may have a fortress balance sheet, but every regulatory body under the sun and every consumer group out there seems to want a turn at taking a piece of the bank's treasury. At some point, this will become a serious matter in terms of earnings, accounting, leadership, the stance with regulators and on and on.

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