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Has JPMorgan become a 'piñata bank'?

Wednesday, 28 Aug 2013 | 12:20 PM ET
US Government seeks $6 billion from JP Morgan
Wednesday, 28 Aug 2013 | 9:08 AM ET
The "Squawk on the Street" team dissects the news that U.S. authorities are seeking more than $6 billion from JP Morgan related to mis-sold securities.

U.S. authorities are reportedly seeking over $6 billion in damages from JPMorgan Chase related to a string of allegedly mishandled mortgage securities, another $80 million in fines over dealings with retail customers and perhaps up to $600 million more over the "London Whale" scandal.

Has JPMorgan become regulators' favorite piñata?

Sulvia Schug | E+ | Getty Images

"I think you're really starting to reach back. Now they're really at the tail end," CNBC anchor Jim Cramer said Wednesday.

"None of these are new cases. I think that's the important thing. None of these are new."

The regulatory activities are coming from so many directions, Cramer said, that JPMorgan is basically a "piñata bank."

(Related: Dimon: I wouldn't have left If I lost leadership vote)

"There's a lot of blame to go around. A lot of people still hate the bankers," he added. "Do you ever read a story and say, 'Wow, I feel bad for JP Morgan'? You don't. These guys are just big targets still."

Earlier this week, noted banking analyst Dick Bove downgraded JPMorgan shares, saying the bank was the victim of regulatory "McCarthyism."

Cramer pointed out that JPMorgan has underperformed the financial sector; he chalks it up to the firm's litigation overhang.

Bloomberg News reported Wednesday that the six biggest U.S. banks have spent $103 billion in legal fees since the financial crisis, more than they have paid in dividends.

Bloomberg noted that about 40 percent of those expenses have come up since the beginning of 2012.

JPMorgan also reportedly is in talks with a group of regulators, including U.S. prosecutors, to settle probes of the bank's "London Whale" trading losses last year for about $600 million, according to a person familiar with the talks.

Regulators, including the U.S. Securities and Exchange Commission and the UK Financial Conduct Authority, are in intense negotiations with lawyers for JPMorgan to reach a global settlement, the source told Reuters.

Prosecutors from U.S. Attorney Preet Bharara's office were also involved in the talks, the source said. Their role in the talks was unclear.

—Jim Cramer's charitable trust owns shares of JP Morgan

—By CNBC's Paul Toscano. Follow him on Twitter @ToscanoPaul and get the latest stories from "Squawk on the Street."

Reuters contributed to this report.

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