Analysts told Bloomberg that major financial institutions such as BofA and Citigroup are âunder legal attackâ from a range of actions taken by homeowners and investors who lost money during the global credit crunch.
Richard Bove, an analyst at Rochdale Securities in the US, told the news provider: âTheyâre similar to the asbestos or the tobacco industry, and theyâre going to be repeatedly sued in the next few years.â
JPMorgan reportedly spent $5.2 billion during the first nine months of 2010 on legal costs, a figure compared with a $10 million gain in that business area for the bank in the same period the previous year.
The news provider revealed that the spend could increase if it has to pay out more money to counter law suits involving trustees of the Lehman Brothers and Bernie Madoff estates.
In its financial figures for the third quarter, JPMorgan set aside $1.3 billion to cover possible legal costs.
By Jim Ottewill