JPMorgan Chase & Co. (JPM), Bank of America Corp (BAC): Don’t Bank On a Big Dow Climb Today

Bank of America Corp (NYSE:BAC) headed into the third day of its hearing over a two-year-old settlement with investors for a batch of mortgage-backed securities that turned sour. The $8.5 billion on the table is being objected to by some large names, including American International Group Inc (NYSE:AIG), which objects to the size of the settlement. AIG is basing its argument on another insurer’s experience, when MBIA reached a settlement over MBS’s for $0.60 on the dollar. If that amount became the basis for Bank of America Corp (NYSE:BAC)’s case, the price tag could reach $60 billion. The bank is arguing that it had the right to put its Countrywide segment into bankruptcy instead of offering the current amount to investors, but instead chose to offer a deal.

Outside the Dow, Citigroup Inc. (NYSE:C) is also down following its return to the courtroom over a deal gone sour. Private equity firm Terra Firma claims that the bank lied about a second bidder in its purchase of publisher EMI, driving the price up unneccessarily. Though the case had been heard in court before, and Citi had prevailed, a federal appeals judge overturned the ruling based on improper jury instructions. The case could cost the bank up to $8.3 billion.

The article Don’t Bank On a Big Dow Climb Today originally appeared on Fool.com.

Fool contributor Jessica Alling has no position in any stocks mentioned — you can contact her here. The Motley Fool recommends American International Group (NYSE:AIG). The Motley Fool owns shares of American International Group, Bank of America, Citigroup, and JPMorgan Chase and (NYSE:JPM) has the following options: Long Jan 2014 $25 Calls on American International Group.

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