Settlements Won't Settle Risk for Big BanksThe KBW Bank Index ( I:BKX) on Wednesday was down 0.7% to 64.68, with all but five of the 24 index components ending with losses. Big banks seeing the largest declines included JPMorgan Chase ( JPM), with shares down 1.6% to $52.75, Bank of America ( BAC), with shares down over 2% to $14.23, and Citigroup ( C), which was down 1.3% to close at $50.10. By setting aside $9.15 billion during the third quarter for litigation reserves, JPMorgan Chase signaled an eventual huge settlement of with the Department of Justice, Federal Housing Finance Agency other federal regulators and states' attorneys general, over investigations of the company's mortgage lending and loan sales, along with those of Bear Stearns and Washington Mutual, which JPMorgan acquired during 2008. The total figure for that settlement could reach $13 billion, according to media reports. But the Wall street Journal on Wednesday reported that a group of investors, including BlackRock ( BLK) and Neuberger Berman are seeking "at least $5.75 billion" from JPMorgan Chase, to recover losses on mortgage-backed securities sold to them by the bank and the firms it acquired.
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