Wall Street Banks Have Been Hoarding Billions For One Legal Settlement — And It’s Almost Here

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Wall Street Banks Have Been Hoarding Billions For One Legal Settlement — And It’s Almost Here

November 10, 2014 by ajfloyd
Wall Street has been bracing for a billion-dollar currency manipulation investigation that will be over in a few weeks, says The Wall Street Journal.
In the past few weeks, it seems banks have been scrambling to prepare for whatever regulators on both sides of the pond may find after a fairly boring earnings season. Performance was average to slightly below, and the total trading rout banks expected didn’t turn out to be that bad.
But then the disclosures started coming.
First Citigroup revised its earnings down to $0.88 per share from $1.07 per share to add $600 million to its legal reserves.
Then JPMorgan Chase also disclosed that US and UK regulators were conducting criminal (the Department of Justice is in there) and civil probes into its Forex trading operations. Of course, it’s cooperating, but it has no idea how much it could lose in such a settlement — maybe nothing, maybe $6 billion.
Finally, on Thursday after the closing bell, Bank of America followed Citi and revised its earnings down by $400 million, adding that to its legal reserves to deal with whatever comes of the probe.
So here’s what we know about the investigation: Barclays, HSBC, Royal Bank of Scotland Group, UBS, Citigroup, JPMorgan, and Bank of America are all involved.