After a strong start to the year, JP Morgan Chase (JPM) has rolled back about 7% since early August on a series of bad legal news that looks to take a bite out of company profits.
And while any one of these fines isn’t a big deal, the collective weight of these judgements — and the increasing frequency of lawsuits against big banks like JPM — means that future pressures could put the screws to margins. The threat of increased regulation and oversight is a very real possibility in the medium term.
Consider that JPM just reported a $380 million loss on the quarter, thanks to some $9.2 billion in legal expenses and a cash hoard set aside for future settlements.
CEO Jamie Dimon has long been considered the best bank exec out there, leading the company through the great recession with a deft hand. However, now that the landscape has changed and investors have already bid JPM stock up above its peers, you may want to steer clear of this financial stock.