Closely watched financial analyst Dick Bove cut his rating on JPMorgan Chase on Monday, citing an atmosphere of regulatory "McCarthyism" surrounding the company.
Over the weekend, various media outlets reported that the bank was pulling back from its international banking commitments until its legal issues were resolved, just as Bove has been suggesting would happen, he said in a research note.
The reports followed word that U.S. government had launched a probe into the company's hiring practices in China. It was alleged the bank has been hiring the children of prominent Chinese officials in an effort to curry favor, according to reports filed by The New York Times' DealBook blog.
Bove, a vice president at Rafferty Capital Markets, said he expects the aggressive government actions against JPMorgan to cause customers to flee the bank for overseas rivals.
(Read more: Is the government trying to break up JPMorgan?)