Due to legal costs and lower trading revenue, American multinational banking and financial services holding company JPMorgan Chase & Co. reported a 7 percent decline in fourth quarter earnings.

These results also fell short of Wall Street forecasts. Due to the decline, the company's stocks also went down 3.5 percent for the day which is more than the downturn in the broader stock market.

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JPMorgan, the biggest bank in the United States in terms of assets, has taken a financial beating due to the numerous legal costs it is handling from settling lawsuits or other issues with state and federal regulators.

These lawsuits are connected with the bank's role in the housing bubble and subsequent financial crisis.

In the latest quarter, it shelled out as much as $990 million for legal expenses. The figure was more than what analysts expected.

As the bank continues to resolving its problems, CEO Jamie Dimon tells investors to expect more legal expenses this following year.

According to Dimon, the bank will be dealing with "five to six regulators" for every aspect of its legal issue.

Initially, analysts expected JPMorgan to earn $1.31 a share. However, it didn't turn out as forecasted, as they only had $1.19 a share.

They earned $4.93 billion for the three-month period ending in December, compared with the $5.28 billion of the previous year.

The recent developments brought down the stock of the bank fell $2.03 to $56.81. In addition, the total revenue at the bank fell 3 percent to $22.5 billion.

"Those trading numbers came down harder than what analysts thought they would, so that's largely why investors had an issue with their results," said Fred Cannon, director of research for Keefe, Bruyette & Woods.

Despite the apparent declines, 2014 was a very profitable year for JPMorgan. The company earned $21.8 billion, an increase of 21 percent. Even if revenues were flat, the bank was able to sustain a gain. 

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