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January 27, 2014 at 07:00 PM
The past year was a tough one for JPMorgan Chase: The bank had to fork over close to $20 billion in penalties that were levied by various regulators.
The most recent one actually came this January, when JPMorgan Chase was required to pay $2.6 billion to victims of the Bernie Madoff Ponzi scheme as part of a settlement reached with U.S. federal prosecutors.
Under that settlement agreement, JPMorgan admitted that it violated the Bank Secrecy Act and that the bank’s anti-money laundering policies were inadequate to detect Madoff’s massive scheme, which ended up costing investors nearly $20 billion.
JPMorgan Chase faced a double-whammy fine last September when as part of a coordinated global settlement, the bank had to pay $920 million to settle trading losses related to the London Whale case. As part of that settlement, JPMorgan had to fork over $200 million to the SEC for misstating financial results and lacking effective internal controls, and $720 million to the U.K. Financial Conduct Authority, the Federal Reserve and the Office of the Comptroller of the Currency.
The bank also agreed to admit guilt in the charges brought by the SEC that it failed to detect and prevent its traders from fraudulently overvaluing investments to conceal hundreds of millions of dollars in trading losses.
The next fine levied during September 2013 came from the Consumer Financial Protection Bureau, which ordered Chase Bank USA and JPMorgan Chase Bank to pay a $20 million penalty for charging credit card customers for services they weren’t receiving. On top of that CFPB fine, the Office of the Comptroller of the Currency ordered both Chase entities to pay a $60 million civil penalty.
The bank refunded about $309 million to customers as part of the CFPB action.
The heftiest fine of $13 billion was levied last November, when JPMorgan agreed to pay to settle charges of selling bad mortgage bonds ahead of the financial crisis.
Have all of these faux pas damaged the bank’s reputation? Apparently not. JP Morgan’s share price has risen more than 25% over the last 12 months. While its fourth-quarter earnings dropped 7.3%, the bank still reported a profit of $5.28 billion, or $1.30 a share, for the quarter. Revenue dropped 1.1% to $24.11 billion.
