JPMorgan to reach settlement with US authorities over forex investigation

JPMorgan Chase & Co said yesterday (May 5th) it is in "advanced stages" of settlement talks with the US Department of Justice and the Federal Reserve over an investigation into the bank’s foreign-exchange sales and trading activities. The bank detailed new investigations in its latest quarterly filing with the US Securities and Exchange Commission. 

Several US and European banks including JPMorgan are involved in a criminal investigation over foreign exchange trading. In addition, the Financial Conduct Authority is investigating the compliance of the bank's London branch and European unit regarding custody services related to client assets. 

In its filing, the bank also said that French authorities are investigating its role in a series of transactions involving senior managers of investment firm Wendel Investissement to restructure its holdings in the French investment firm, the Wall Street Journal reports.

Legal expenses reach $5.5 billion

The group revealed in its filing that its "reasonably possible" legal expenses, in excess of legal reserves, could be as much as $5.5 billion (£3.6 billion) as of March 31, down from $5.8 billion three months earlier.

This filing comes as the bank paid almost $1 billion in recent years due to a range of investigations into alleged wrongdoing. The bank also settled a related lawsuit in January agreeing to pay institutional investors about $100 million.

In 2013, JPMorgan Chase agreed to a record $13 billion settlement with US authorities for misleading investors during the US housing crisis and collapse in prices.

It has seen its profit drop 6.6 per cent in the fourth quarter of 2014, dragged by legal costs. It said fixed-income trading revenue was down 23 per cent and legal costs were about twice as high as initially forecast. Net income declined to $4.93 billion, from $5.28 billion a year earlier.