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JPMorgan Chase & Co. (JPM - Analyst Report) has revealed that it is facing eight different probes from the U.S. Department of Justice (DOJ). The banking giant is embroiled in civil and criminal cases related to its hiring malpractices, faulty mortgage backed securities (MBS) sales, trading practices and rigging of the interest rate.

JPMorgan further revealed that its energy trading business is also under scrutiny. Earlier in July, the company had agreed to pay $410 million as part of its settlement with the Federal Energy Regulatory Commission for manipulating electricity prices in California and the Midwest regions. However, the company did not acknowledge any wrongdoings.

The company’s foreign exchange trading business is also being investigated. As confirmed by a DOJ official, the probe – which is in the preliminary stage – is scrutinizing a possible manipulation of about $5.3 trillion per day in the foreign exchange market.

Further, last week, the bank announced a settlement with the Federal Housing Finance Agency (FHFA), – conservator of Government Sponsored Enterprises (GSEs) Freddie Mac (FNMA) and Fannie Mae (FMCC) – pertaining to sale of home loans and MBS.

JPMorgan has also been accused of hiring wards of influential Chinese officials on conditions of exploiting their government contacts. The probe, which began in China, has now intensified and spread to countries across Asia.

The company also faces charges related to the infamous ‘London Whale’ trading debacle, which resulted in a trading loss of $6.2 billion. It failed to foresee trading risks as well as regulate traders who adopted unfair means to downsize losses. Due to this, the investors as well as the regulators were misled, prompting the investigation.

The litigation revolving around Washington Mutual Inc. continues to be an overhang. The troubled mortgage lender was acquired by JPMorgan in 2008 at the request of the Federal Reserve. Therefore, the government expects the legal expenses associated with the acquired units to be borne by the company.

Moreover, there are ongoing investigations related to JPMorgan’s possible involvement in manipulating the London Interbank Offered Rate (LIBOR). Additionally, home loans provided by the company are also under scrutiny for violating the requirements of the Federal Housing Administration’s Direct Endorsement Program. Further, the DOJ is probing the extent of the company’s negligence with respect to Bernie Madoff’s ‘Ponzi Scheme,’ which resulted in a multibillion-dollar fraud.

The regulatory environment in the U.S has become quite stringent with the authorities keeping a strict check on the activities of financial institutions. These organizations have been often found to miscalculate their risk-taking ability, thereby causing huge losses to investors. Hence, as a precaution, the institutions are subject to external regulations in order to avoid economic fallout in the future.

Apart from JPMorgan, other banking majors facing charges related to various mortgage related investigations and lawsuits include Bank of America Corporation, Citigroup, Inc. (C - Analyst Report) and The Goldman Sachs Group, Inc.

JPMorgan currently carries a Zacks Rank #3 (Hold).

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