Tomahawk, WI 10/25/2013 (BasicsMedia) – Fewer banks can match JPMorgan Chase & Co. (NYSE:JPM)’s market cap of around $196.79 billion. JPM has endured through a very terrible 2013 in financial terms, especially during the third quarter, where it was the only one of the largest U.S banks to report losses. The losses were because of the huge litigation costs the bank incurred in trying to answer to several lawsuits brought up against it in the last two to three years. Reports indicate that the bank is prepared to part with close to $13 billion to settle all legal matters for the last time.

JPM’s Losses in 2013 Will Increase

Even for a bank of JPM’s stature, spending $13 billion on a singe area, in the full knowledge that it will not recover this money, is too much to bear. Its losses in the recently announced third quarter were reported to have run into billions of dollars. There is nothing wrong with JPM hiring attorneys to defend it in court, but most Wall Street analysts believed that the bank would opt to settle rather than see its legal matters last a day longer in the courts. Now that JPM did not put a stop to these legal matters by settling with the U.S Justice Department, it has lost billions.

Another issue that needs to be looked at is the raging debate as to whether any settlement JPM enters into with the U.S Justice Department is fair or not. Those of this view say that the public has a right to find out whether JPM is guilty as charged or not. They believe that JPM owes the pubic some explanation and the only recourse open to them is through the courts. This is a huge dilemma for the U.S Justice department, which has to determine this matter based on the two points of view, from JPM as well as catering for the needs of those interested in justice.

JPM’s Action is Understandable

I understand why JPM would not be too keen on the court cases. As the third quarter of 2013 has proven, JPM will continue making losses as it pays the litigation costs that run into billions of dollars. JPM has hired some of the most experienced and well-known legal firms to handle these legal matters, and it has to pay top dollar to retain their services. Unfortunately, it is spending all this money on matters that will not bring in more revenue. The bank’s shareholders are also interested in finding out the truth, but this will not be possible through the $13 billion agreement.

If JPM goes ahead to settle at $13 billion with the government, this could turn out to be the worst year it has endured since the end of the 2008 global financial crisis. The bank has already lost billions of dollars and this will go higher in case it settles with the U.S government. The ban has said that it expects to spend close to $9.2 billion handling all other legal matters that will crop up because of the current lawsuits. Settling with the U.S government will help JPM in many ways, but it will have lost huge amounts of money, and shareholders will not be pleased

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