Just What the Doctor Ordered: More Oversight at JPMorgan
JPMorgan (NYSE:JPM) announced on Monday that it intends to edit its corporate governance principles, expand its board of directors, and increase the authority of its lead independent director to supervise Chairman and CEO Jamie Dimon. Separately, at the Barclays Global Financial Services Conference, Chief Financial Office Marianne Lake said that the bank has increased its litigation reserve by more than $1.5 billion — a move that highlights the enormity of the legal hurdle facing the firm.
JPMorgan has been slammed with numerous legal and regulatory headaches in recent months. Not only is the bank dealing with the legal repercussions of 2012’s $6+ billion London Whale trading loss, it is involved in more than a handful of separate investigations led by U.S. Department of Justice and other government agencies looking into various aspects of several of JPMorgan’s past operations.
The legal problems and resulting pressure on JPMorgan’s stock is unusual for the bank, which up until the London Whale fiasco was often held up as an example a well-run financial institution — it even emerged from the financial crisis stronger than most of its peers. But now, JPMorgan has calculated that its losses from lawsuits and federal investigations could exceed its legal reserves by as much as $6.8 billion, according to a filing made August 7 with the Securities and Exchange Commission.