JP Morgan is spending more on fines and lawyers than on employee salaries

[applegrove]

JP Morgan is spending more on fines and lawyers than on employee salaries

By Tim Fernholz at Quartz

http://qz.com/134534/jp-morgan-is-spending-more-on-fines-and-lawyers-than-on-employee-salaries/

"SNIP..............................


JP Morgan devoted $9.3 billion to legal expenses last quarter, driving its net loss of $380 million. Its legal troubles took up 39% of its total revenue in the same period, by far the company’s largest single expense.


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That’s right: The largest bank in the United States spends more money fighting and paying off legal and regulatory challenges than it does paying its staff, buying securities or paying rent on its 5,600 Chase retail bank branches.


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What does your largest expense say about your business? Ideally, the biggest cost should get at the heart of what the firm does. Goldman Sachs’ largest expense was compensation and benefits for its (in)famous talent. Apple’s largest expense in its most recent quarterly report was on sales, largely new stores and employees. General Motors’ largest expense is building cars.


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For the first time, the bank revealed its total expenditures on legal costs. Since 2010, JP Morgan has devoted $31 billion to legal problems, spending $8 billion on settlements and reserving $23 billion for future costs. That’s almost half of its net earnings ($57.5 billion) in the same period, keeping in mind some of those reserves can be returned to stockholders if settlements and legal fees turn out to be less than expected. The exhaustive list of all the civil and criminal investigations JP Morgan is dealing with—from Libor to the London Whale to the Madoff ponzi scheme—could lead to the largest bank fine in history, some $11 billion. That would be on top of the the $3.7 billion the company has already paid this year. Settlement talks are ongoing.




.............................SNIP"

[applegrove]

1. So tax savings over the years have gone to increase the number of

lawyers to fight regulations? Is that right?

[dixiegrrrrl]

2. Awwwwwwwwwww

[The Magistrate]

3. It Is A Start, Ma'am

Though the fines are not nearly large enough, when actually levied, and all settlements should include an admission of wrong-doing by the bank.