29 August 2013

Top US banks pay out more in legal costs than divis

Banks see legal costs rise

The top six US banks have accrued $103 billion in legal expenditure in the past five years - more than they have collectively paid in shareholder dividends.

The banks are Bank of America, JP Morgan, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley. The costs cover legal bills, funding in-house legal teams, litigation and claims payments, according to Bloomberg Businessweek which compiled the data. Well over a third (40 per cent) of the expenses have been run up since January 2012 - with banks warning that the costs could surge under pressure from regulators, prosecutors and investors.

'There may be a sense that financial institutions have gotten away with a lot and maybe now is the time to catch up,' lawyer Daniel Hurson, former a prosecutor at the Securities and Exchange Commission, told Businessweek.