NEW YORK (TheStreet) -- It was a boring couple of weeks when the nation's largest banks reported their third quarter earnings in October. That's not the case as they began to file quarterly 10-Q reports with the Securities and Exchange Commission.
A scan of 10-Qs from the likes of JPMorgan (JPM), Citigroup (C), Bank of America (BAC), Goldman Sachs (GS) and Wells Fargo (WFC) indicate that the nation's largest banks continue to be hamstrung by litigation tied to mortgage securities they sold during the housing bubble.
Meanwhile, investment banks with large trading operations also appear exposed to a global probe into foreign exchange markets, which has already stung most of the largest banks in Europe.
So much for a boring quarter, depressed by a slowdown in mortgage refinancing activity and a quarter-over-quarter tumble in cash cow fixed income trading businesses.
In fact, investors are probably are better paying more attention to the intermittent trickle of bank 10-Qs that come after earnings than they are to the actual headline revenue and earnings per share numbers that cross every quarter.
Last quarter, JPMorgan dropped a bombshell on investors when it disclosed in a 10-Q it was being investigated in a criminal probe by the U.S. Attorney's office for the Eastern District of California. The probe centers on JPMorgan's sale of mortgage backed securities (MBS) between 2005 and 2007.
JPMorgan also said civil authorities had deemed the bank to have broken securities laws.
"In May 2013, the Firm received a notice from Civil Division stating that it has preliminarily concluded that the Firm violated certain federal securities laws in connection with its subprime and Alt-A residential MBS offerings during 2005 to 2007," JPMorgan said last quarter.