After celebrating their second-quarter earnings, JPMorgan Chase announced disappointing third-quarter stats, with losses of nearly half a billion.
“While we had strong underlying performance across the businesses, unfortunately, the quarter was marred by large legal expense. We continuously evaluate our legal reserves, but in this highly charged and unpredictable environment, with escalating demands and penalties from multiple government agencies, we thought it was prudent to significantly strengthen them,” said Chairman and CEO Jamie Dimon. “While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters.”
Now, JPMorgan Chase has decided to move ahead with laying off 15,000-plus workers by the end of 2014. Operating a full year ahead of schedule, 4,000 jobs have been eliminated already, predominantly in the consumer business. Citing the increasing use of electronic services like mobile deposits, online accounts and more, one wonders if this is more of a smokescreen for the real issue here: the recovery of funds after devastating legal discourse.
As Forbes reported last month, not long after the release of JPMorgan’s earnings report, the two percent dip in earnings is due to the heavy legal costs associated with over a dozen different cases. The company admitted to setting aside $23 billion to cover its legal fees, however; that number could balloon out of control should more legal measures be weighed against the company.
As if potentially losing one’s job wasn’t enough, global regulators are reportedly monitoring the private chat room discussions between JPMorgan Chase employees and foreign correspondents, as well as other peers. Messages are being intercepted and used as evidence in building cases regarding the manipulation of interest rates. Bloomberg, via a source, reports that JPMorgan may encourage traders to use phones and e-mails rather than chat rooms to assist clients in large currency transactions.