Am I crazy? My first thought after reading that JPMorganChase (NYSE:JPM) was paying $2 billion to settle a WorldCom lawsuit -- involving roughly $5 billion in WorldCom bonds the company sold investors in 2000 and 2001 -- was, "How much is $2 billion to JP?"

Well, as it turns out, it is 45.5% of trailing annual net income and 6.5% of trailing annual revenue. That's big.

A more appropriate first response would have been, "Why settle?" It can't be because Citigroup (NYSE:C) settled last May for $2.65 billion. The Associated Press is reporting that JP Morgan Chase was offered the same deal last year as Citi -- at a cost of $1.4 billion -- but said, "No way!" Oops; that "No" just cost shareholders a cool $600 million extra.

It almost seemed that JPMorgan Chase settled because everyone else was. Last week Deutsche Bank (NYSE:DB) agreed to toss $325 million into the settlement basket, while ABN Amro (NYSE:ABN) decided to drain $278 million of its shareholders' cash for settlement. The week before that, Bank of America (NYSE:BAC) tapped its treasury for $460.5 million, while such notables as Credit Suisse First Boston (NYSE:CSR) and Goldman Sachs (NYSE:GS) settled for $12.5 million each.

So, what's the big deal? Hey, it's just $2 billion, right? Try this logic: We'll go forward under the assumption that the fees JPMorgan Chase earned for selling $5 billion in WorldCom bonds was a fraction of the $2 billion settlement -- and those fees were before taxes, too. Now it is paying $2 billion in after-tax income to settle this case. That's a big hit.

To me it is staggering to think of a company with 160,000 employees toiling away, day after day, and earning $4.4 billion in 2004, only to pay 45% of that as a settlement.

Most investors will look at analyst estimates that JPMorgan Chase will earn $3.48 in 2006 and see the stock trading at an affordable 10 times forward earnings. And that's after a 14% decline over the past year. Is that a fair price? Well, if this is truly a one-time event, probably so, and bullish investors may be looking at a potential buying opportunity. For investors who worry that this tomfoolery may portend related monsters lurking in JP's closet, then the stock might not be down enough.

Fool contributor W.D. Crotty does not own shares in any of the companies mentioned. Click here to see the Motley Fool's disclosure policy.