JPMorgan Chase & Co. (JPM), Bank of America Corp (BAC), Wells Fargo & Co (WFC): When Will It End?

Page 1 of 2

Editor’s note: This article was originally published at market close yesterday.

The Dow Jones Industrials ended its run of record highs today, dropping 22 points. Playing a big role in that relatively minor decline was JPMorgan Chase & Co. (NYSE:JPM), which fell 1.5%. Yet, the latest news came after the market closed for the day, as the California Attorney General sued the banking giant over allegations of illegal debt-collection tactics from more than 100,000 credit card holders.

As Fool contributor John Grgurich noted earlier, today’s decline in the bank’s stock could stem from the fact that JPMorgan faces a critical shareholder meeting in less than two weeks, after which the role of CEO and Board Chairman Jamie Dimon could dramatically change. JPMorgan Chase & Co. (NYSE:JPM)’s share-price drop wasn’t out of line with the performance of other banks, as fellow Dow component Bank of America Corp (NYSE:BAC) fell 0.8%, while Citigroup Inc. (NYSE:C) and Wells Fargo & Co (NYSE:WFC) lost about the same percentage as JPMorgan. Moreover, news of the lawsuit didn’t move JPMorgan Chase & Co. (NYSE:JPM) shares substantially in early after-hours trading.

But the suit is troubling for a couple reasons. First and foremost, the card-collection lawsuit makes allegations that look eerily similar to the mortgage robosigning debate that led to a massive settlement among various mortgage lenders. With hundreds of lawsuits being filed in a single day in some instances, the California AG argues that bank officials never reviewed files, bank records, or other documents before signing legal papers. It also alleges false misrepresentations that customers had been notified of the suits when customers were, in fact, unaware of them.

JPMorgan Chase & Co. (NYSE:JPM)More importantly, though, the California AG’s lawsuit represents just the latest in a seemingly never-ending timeline of litigation for major banks. Bank of America Corp (NYSE:BAC) made huge progress earlier this week by settling a lawsuit with MBIA Inc. (NYSE:MBI); yet, the very same day, the New York Attorney General filed suit against it and Wells Fargo & Co (NYSE:WFC)alleging violations of the $25 billion settlement the banks made with federal and state regulators just over a year ago. Although major banks have won initial victories in lawsuits related to the LIBOR rate-fixing scandal, potential liability may nevertheless still exist there.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!