According to CNBC’s Kate Kelly, JPMorgan has just released its 10-K and it reveals some shocking information.
Kelly says “JPMorgan has been named as a defendant in about 10,000 different law suits. And as a result, they could end up needing an additional $4.5 billion on top of what they’ve already set aside for legal losses."
What should you make of it?
Instant Insights with the Fast Money traders
Fast trader Karen Finerman is a JPMorgan shareholder but she isn’t concerned by these developments. "They talked about substantial legal costs in their last call," she says. "I don’t know this is materially different (than what they said)."
And looking at the burden per share, she adds, “there’s a tad under 4 billion shares outstanding so that’s about $1/share."
Joe Terranova wonders what it means for the dividend. “Do you believe it delays the reinstitution of the dividend?” he says. “I don’t know. But if they’re talking about exceeding their reserve, it could get delayed.”
Tim Seymour thinks it’s a big headline but he isn’t worried, either. He doesn’t feel $4 billion is all that much in the scheme of things. "And the fact that they're being more conservative on estimates of potential losses is not a surprise," he adds. He’s a buyer of weakness.
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Trader disclosure: On Feb 28, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymour owns (BAC); Seymour owns (F); Seymour owns (FXI); Seymour owns (GE); Seymour owns (POT); Seymour's firm owns (TTM); Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Adami's wife works for (MRK); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (MDY); Finerman's firm is short (XRT); Finerman's firm is short (IJR); Finerman's Firm Is Long S&P Puts; Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leap, Finerman Owns (BAC); Finerman's Firm Owns (BBY); Finerman's Firm And Finerman Own (BP); Finerman owns (C); Finerman Owns (GOOG); Finerman's Firm And Finerman Own (HPQ); Finerman's Firm Owns (IBM); Finerman's Firm Owns (JPM), (JPM) Leap; Finerman Owns (JPM); Finerman's firm owns (M); Finerman's Firm And Finerman Own (MSFT); Finerman's firm owns (TGT); Finerman's Firm Owns (WMT); Terranova owns (VRTS); Terranova owns (C); Terranova owns (UPL); Terranova owns (ABT); Terranova owns (MS); Terranova owns (PBR); Terranova owns (BAX); Terranova owns (TEVA); Terranova owns (CVI); Terranova owns (RSX); Terranova owns (SU); Terranova owns (CNQ)
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