JPMorgan Chase’s Legal Woes

I’m a big fan of JPMorgan Chase ($JPM) as an investment but I have to concede that the bank is not exactly Mr. Popular with the American public. The bank’s legal problems continue to mount, and I think it’s time for Jamie Dimon to go. He’s a brilliant executive but he’s now more of a liability than an asset. As a rule of thumb, banks should be boring. Having Jamie around makes JPM anything but boring. He recently expressed his disagreement with an analyst by saying, “that’s why I’m richer than you.” Some people find this hilarious. Me, not so much.

The New York Times noted that “at least” eight different federal agencies are currently investigating JPM. Yikes, that ain’t good. Plus, there’s still the problem of the London Whale fiasco and now the Feds are looking at criminal charges that JPM lied to investors. If that’s not enough, the Feds are also looking at the possibility that the bank didn’t reveal suspicions about Bernie Madoff.

Earlier this year, the big banks agreed to a settlement over mortgages abuses. The banks were supposed to go through their mortgages one-by-one and rectify the mistakes. Well, JPM screwed this up. To be fair, the other banks are having difficulty resolving this as well, but it’s another headache JPMorgan doesn’t need.

Again, to be fair to JPM, many of these issues seem to be areas where the bank was acting in good faith but simply bungled. Plus, the amount of money involved, even in the London Whale trade, are relatively small compared with the bank’s overall profile, but there are too many headlines to worry about.

Personally, I’d like to see Jamie go, and I’d like to see the bank split up.

Posted by on March 27th, 2013 at 11:36 am


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