One of the nation’s largest lenders will spend billions this year to clean up its legal messes, according to a Wall Street Journal report.
JPMorgan Chase & Co., withering under repeated barrages from battalions of lawyers and regulators, will spend an extra $4bn this year to put the lid on its compliance problems, the Journal reported Friday.
“Fixing our controls issues is job No. 1,” CEO James Dimon told the Journal. “This is a huge investment of people, time and money … but it will make us stronger in the long run.”
The lender is adding $1.5bn to its risk management and compliance budgets and dumping an additional $2.5bn into its litigation reserves this year, according to the Journal. Between 2008 and 2012, JPMorgan spent $17.7bn on litigation alone, and is currently facing more regulatory enforcement actions than any other U.S. bank, as well as at least seven separate Justice Department investigations, the Journal reported.
The bank is also facing numerous lawsuits. Last month, the Federal Housing Finance Administration demanded $6bn in order to settle a lawsuit alleging that JPMorgan misrepresented how thoroughly it vetted the mortgages backing some $33bn in securities during the subprime fiasco. Also last month, the bank was ordered to pay $42.5 million to billionaire Leonard Blavatnik in a suit over a tanked investment in mortgage-backed securities. JPMorgan is also facing an ongoing criminal probe by the DOJ over its practices in the selling of mortgage-backed bonds.
Despite its legal and regulatory woes, JPMorgan continues to rake in profits, posting record earnings last year, according to the Journal.