Sometimes, the best way to handle trouble from government watchdogs comes from Stephen King’s “Storm of the Century:” Give them what they want, and they’ll go away. That’s what happened to bank stock JPMorgan Chase & Co (NYSE:JPM), who handed over an $18 million fine to the Securities and Exchange Commission (SEC), a move that settled a significant suit. Investors were less than pleased, however, as shares dropped nearly 1.5% in Tuesday morning’s trading.
The $18 million fine in question—which came without the requirement that JPMorgan Chase actually admit or deny the accuracy of any charges connected to said fine—was over violations of whistleblower rules for a three-year stretch. The SEC claimed that JPMorgan Chase routinely required its retail clientele to sign confidentiality agreements when they received a settlement from the bank for over $1,000. Under the terms of the agreement, reports noted, clients were not permitted to contact the SEC directly about said issues but were permitted to respond to communications from the SEC.
The director of the SEC’s enforcement division subsequently noted, “Whether it’s in your employment contracts, settlement agreements or elsewhere, you simply cannot include provisions that prevent individuals from contacting the SEC with evidence of wrongdoing.”
Is JPM a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on JPM stock based on 16 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 22.02% rally in its share price over the past year, the average JPM price target of $184.58 per share implies 10.75% upside potential.
