NEW YORK (CBS.MW) - J.P. Morgan shares fell in pre-open trading Monday after a judge dismissed the bank's fraud claims against several insurers, guaranteeing that the dispute will now move a jury trial for resolution.
The dispute hinges on whether several transactions totaling about $1 billion between the bank and Enron-related entities were legitimate commodities trades, or as alleged by the insurers, fraudulently concealed loans.
Analyst Brock Vandervliet at Lehman Bros. said the dismissal was a "significant setback," saying it may "wipe out a full quarter of earnings" since the company didn't appear to set aside any reserves for the losses.
He reiterated his "equal weight" rating, saying he saw no catalyst for the shares despite low valuation.
J.P. Morgan (JPM: news, chart, profile)shares surrendered $1.04, or 4.7 percent in pre-open trading.
Citigroup (C: news, chart, profile) shares are also likely to face pressure Monday, as the nation's largest financial institutions is involved in similar litigation with its insures. |
