Banking titan JPMorgan Chase (JPM) - Get Report agreed to shell out $2.5 million to settle a class-action lawsuit stemming from its 2018 decision to classify purchases of cryptocurrency with Chase credit cards as cash advances, creating higher fees.
The 62,000 class members will receive about 95% of the fees they were illegally charged, the plaintiffs said in a settlement motion filed last week, Reuters reported. JPMorgan won’t admit wrongdoing as part of the deal.
“Chase has agreed to enter into this agreement to avoid the further expense, inconvenience, and distraction of burdensome and protracted litigation, and to be completely free of any further claims that were asserted or could have been asserted in the action,” the motion said.
The settlement remains subject to approval by federal court in Manhattan.
Morningstar analyst Eric Compton is quite bullish on JPMorgan.
“JPMorgan Chase is facing a difficult macro backdrop in 2020 due to Covid-19, and earnings will be pressured,” he wrote in an April report.
“Management has consistently reiterated that it will keep investing in the business as it attempts to expand the company's existing advantages even more. The company's balance sheet remains strong, with a common equity Tier 1 ratio well above regulatory minimums.”
Compton’s base case: “JPMorgan will get through the upcoming downturn and remain one of the most dominant banks for years to come.” He put fair value for the stock at $113.
JPMorgan recently traded at $98.93, up 1.7%. The stock has dropped 16% over the past three months and it was off 30% in 2020 through the close of trading Friday.