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Big bank settlement tab over $7.4B so far in 2017


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Big bank settlement tab over $7.4B so far in 2017

During the first nine months of 2017, the six largest U.S. banks tallied $7.42 billion in settlements, fines and censures. By comparison, these same banks reached over $15 billion in settlements in all of 2016.

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JPMorgan Chase & Co.

JPMorgan leads the pack with $4.98 billion in settlements and judgments so far this year, but that amount is likely to fall significantly. On Sept. 26, a Dallas County probate court ordered the company to pay $4 billion in punitive damages for mismanaging the roughly $19 million estate of a former American Airlines executive. In addition, the bank was charged $4.7 million in actual damages and an additional $5 million in attorneys fees.

According to a report from Bloomberg News, the jurors awarded $8 billion in punitive damages, but some of those damages may be duplicated. Either way, Andrew Gray, a JPMorgan spokesman, told Bloomberg that the bank was "highly confident" the verdict would be reduced.

In July, JPMorgan reached a $71 million settlement for manipulating the yen London Interbank Offered Rate and Euroyen Tokyo Interbank Offered Rate benchmark rates. In June, the company reached a $35 million settlement for allegedly advising a company called Good Technology to sell to BlackBerry for $425 million despite higher bids from other potential acquirers in 2015.

Citigroup Inc.

Citigroup has been hit with $2.04 billion in settlements and penalties so far this year, the largest of which was a $1.74 billion settlement with Lehman Brothers Holdings Inc. reached in September. The company had about $2.1 billion on deposit from Lehman for trading purposes before Lehman filed for bankruptcy, which Lehman said should now be used to pay its creditors. Citi, meanwhile, said it was owed the full amount because of Lehman's bankruptcy. The two entities agreed that Citi would return $1.74 billion to Lehman's estate.

In addition, Citi reached a $130 million settlement for LIBOR rigging during the third quarter.

Wells Fargo & Co.

Although Wells Fargo has had a spotlight on it since 2016's consumer accounts scandal broke, the company has so far reached only $257.0 million in total settlements so far for the year. In July, a judged granted preliminary approval to a $142 million settlement tied to the fake-account scandal after an additional $32 million was added in April to the original $110 million settlement that was reached in March.

Later in July, the company agreed to refund 570,000 auto loan customers approximately $80 million for faulty collateral protection insurance policies.

Bank of America Corp.

Bank of America has reached $71.6 million in settlements or penalties so far this year. The bank's largest settlement was May's $37 million deal with Tutor Perini Corp., related to the latter's purchase of auction-rate securities from the bank.

In the third quarter, subsidiary Merrill Lynch agreed to a $2.5 million civil money penalty from the CFTC, which charged the company with failing to supervise employees. In August, the company reached a $17 million settlement in a bond-rigging lawsuit.

On August 15, the company reached a $6 million settlement in a dispute over foreclosed property, which will likely replace a $45 million fine handed down earlier in the year.

Bank of America also has $1.13 billion in outstanding claims from the FDIC over deposit insurance assessments. Originally set at $542 million in January, the agency added an additional $583 million in April. The settlement has not been finalized.

Morgan Stanley and Goldman Sachs Group Inc.

Morgan Stanley and Goldman Sachs have reached very few settlements so far in 2017; Morgan Stanley has reached five settlements totaling $75 million, while Goldman Sachs has one $2.5 million fine from FINRA for not reporting over-the-counter and intraday positions numerous times.

Morgan Stanley's most recent settlement occurred in July, when the company reached a $50 million settlement for manipulating forex. In July, Morgan Stanley was sued by the Corte Dei Conti of Italy over speculative derivative contracts that also contained unfair termination clauses, for which the government reportedly paid Morgan Stanley 3 billion to terminate.

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Click here for a month-by-month and company-by-company breakdown of settlements announced or finalized in 2017.