Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!


Legal costs blast J.P. Morgan’s bottom line

The company sets aside $9 billion for legal costs, causing quarterly loss

J.P. Morgan’s financial woes continue to snowball, as the company’s decision to set aside $9 billion to add to a fund to address its continuing legal troubles has led to a rough quarterly report.

The company is staring down the barrel of what could be the largest ever settlement with the U.S. government over mortgage securities issues. The case is still ongoing, but reports have stated that J.P. Morgan could be on the hook for at least $11 billion in fines.

To help buffer the potential fines and legal costs, the company has set aside $9 billion, bringing its total pool of funds for these costs to a reported $23 billion. This $9 billion earmark did not come without additional costs, however.

The bank released its quarterly earnings on October 11, and the news was not good. It tallied a loss of $380 million, which is a far cry from the same quarter last year, where J.P. Morgan racked up a net income of $5.71 billion.

This is the first quarterly loss for the bank since 2004, and the first the company has experienced under the stewardship of CEO James Dimon. J.P. Morgan was one of the few major banks to avoid posting a quarterly loss during the financial crisis of 2008.

The potential $11 billion price tag the J.P. Morgan faces is a result of ongoing troubles with the Justice Department and the Securities and Exchange Commission. It includes $7 billion in fines to the DOJ and $4 billion that would be paid to homeowners.

Senior Editor and Community Manager

author image

Rich Steeves

Richard P. Steeves is Senior Editor and Community Manager of InsideCounsel magazine, where he covers the intellectual property and compliance beats. Rich earned a B.A....

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.