The Zacks Analyst Blog Highlights: JPMorgan Chase, Bank of America, Goldman Sachs Group, Citigroup and Morgan Stanley

 The Zacks Analyst Blog Highlights: JPMorgan Chase, Bank of America, Goldman
                  Sachs Group, Citigroup and Morgan Stanley

PR Newswire

CHICAGO, Aug. 12, 2013

CHICAGO, Aug. 12, 2013 /PRNewswire/ -- announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include JPMorgan Chase & Co.
(NYSE:JPM-Free Report), Bank of America Corp. (NYSE:BAC-Free Report), The
Goldman Sachs Group, Inc. (NYSE:GS-Free Report), Citigroup Inc. (NYSE:C-Free
Report) and Morgan Stanley (NYSE:MS-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

Here are highlights from Friday's Analyst Blog:

JPM Faces Inquiry from DoJ and SEC

JPMorgan Chase & Co. (NYSE:JPM-Free Report) is being investigated by the
Department of Justice (DOJ) and the Securities and Exchange Commission (SEC)
over the sale of risky residential mortgage backed securities (RMBS). This was
disclosed by the company in its latest quarterly filings with the SEC.

In May 2013, JPMorgan received a notice from the Civil Division containing the
preliminary inquiry's conclusion. The conclusion stated that the company had
violated several federal securitiy laws at the time of selling RMBS during
2005–2007. Additionally, the company has received several subpoenas and
requests for information from federal and state authorities related to
origination of mortgages and the sale of RMBS.

The regulators are scrutinizing as to whether JPMorgan made proper disclosures
to the investors at the time of sale of MBS. Probes are also being conducted
for potential infringement of securitization representations and warranties as
well as due diligence related to RMBS.

Further, JPMorgan is being investigated by the civil and criminal divisions of
the Attorney's Office for the Eastern District of California relating to MBS
that were sold during 2005–2007.

Apart from these, JPMorgan is facing inquiries from the Office of the
Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau
(CFPB). These regulators are investigating the company's practices related to
the collection and sale of credit card debt.

Notably, these are among several other lawsuits that JPMorgan faces related to
its conduct preceding the financial crisis. Given this, at the end of
second-quarter 2013, the company raised its projection of legal losses to $6.8
billion from $6.0 billion in the prior quarter.

The law enforcement agencies have taken an aggressive approach towards
penalizing those responsible for the collapse of the financial market in 2008.
Earlier this week, the DOJ and the SEC filed 2 separate civil lawsuits against
Bank of America Corp. (NYSE:BAC-Free Report) related to the sale of $850
million worth of RMBS in 2008.

Many other global banks including The Goldman Sachs Group, Inc. (NYSE:GS-Free
Report), Citigroup Inc. (NYSE:C-Free Report) and Morgan Stanley (NYSE:MS-Free
Report) are facing investigations and lawsuits related to the sale of risky
MBS during the period prior to the financial crisis.

If following the completion of the investigation, the DOJ and the SEC file
lawsuits against JPMorgan, it would inevitably lead to further rise in
litigation costs and affect the bank's image as well as financials.

Though the overall impact from such lawsuits is yet to be evaluated, these
measures are somewhat reassuring as these are aimed at resisting malpractices
related to the sale of MBS. Most importantly, such measures will likely impart
the much needed transparency to banking procedures concerning the sale of MBS.

Currently, JPMorgan carries a Zacks Rank #2 (Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

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