Banking stocks have been under pressure over the last five trading days as litigations and probes grabbed headlines. Particularly, JPMorgan Chase & Co. JPM and Bank of America Corp. BAC led the way.Banks have been facing legal headwinds pertaining to business malpractices in the pre-crisis period. The law-enforcement agencies are trying to resolve the issues in order to avoid lengthy litigations.Further, deterioration in quality of the loans made to the energy companies continues to be a major headwind for banks. The “criticized” loans in commercial and industrial portfolio driven by the energy related loans are on an upswing which exhibits undue risks and significant losses.Though many of the banks claim exposures to be manageable, risk grade migration within the energy portfolio may lead to higher provisions in the near term.(Read: Bank Stock Roundup for the week ending Apr 29, 2016)Important Developments of the Week1. Legal tussles seem never ending for big banks. Recently, seven major banks settled a private U.S. lawsuit in Manhattan federal court for a penalty amount of around $324 million. The banks in question were accused for manipulation of ISDAfix rates, a benchmark used to appraise interest rate derivatives, commercial real estate mortgages and structured debt securities. The banks – BofA, Barclays PLC BCS, Citigroup Inc. C, Credit Suisse Group AG CS, Deutsche Bank AG DB, JPMorgan and The Royal Bank of Scotland Group plc RBS – are currently awaiting an approval from the court which will also settle the antitrust charges against the banks. Notably, 14 banks were sued by numerous pension funds and municipalities for manipulating the ISDAfix benchmark for personal gains in the 2009–2012 period (read more: Major Banks Sued for ISDAfix Rigging, Settle Case for $324M).2. According to the U.S. Securities and Exchange Commission (SEC) filing, BofA has agreed to settle charges for a 6-year old legal issue by paying $190 million. The settlement will resolve the claim from Federal Home Loan Bank of Seattle related to mortgage-backed securities which were sold prior to the financial crisis. The bank was accused for misrepresenting the value of instrument by providing materially misleading statements.3. The U.S. Justice Department’s criminal division is one of the regulators along with the SEC probing into JPMorgan’s hiring practices in Asia, according to the SEC filing. Regulators are investigating the violation of anti-bribery laws by the bank in 2013. JPMorgan is under the purview of regulators’ doubt for hiring the children and other relatives of well-established politicians and customers in China for acquiring business deals. “The firm is responding to and cooperating with these investigations,” JPMorgan stated in the filing.Price PerformanceOverall, the performance of banking stocks was bearish. Here is how the seven major stocks performed: Company Last Week 6 months JPM -3.1% -6.5% BAC -3.5% -18.3% WFC -1.3% -9.4% C -4.4% -18.1% COF -4.5% -12.6% USB -2.4% -1.1% PNC -2.8% -6.8% In the last five trading sessions, Capital One Financial Corporation COF and Citigroup were the major losers, with their shares decreasing 4.5% and 4.4%, respectively. Moreover, BofA shares declined 3.5%.Over the last six months, BofA and Citigroup were the worst performers with their shares losing 18.3% and 18.1%, respectively. Moreover, Capital One Financial shares fell 12.6%.What's Next in the Banking Space?Over the next five trading days, performance of banking stocks is expected to continue in a similar manner unless any unforeseen incident crops up.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMORGAN CHASE (JPM): Free Stock Analysis Report CITIGROUP INC (C): Free Stock Analysis Report BANK OF AMER CP (BAC): Free Stock Analysis Report CREDIT SUISSE (CS): Free Stock Analysis Report BARCLAY PLC-ADR (BCS): Free Stock Analysis Report DEUTSCHE BK AG (DB): Free Stock Analysis Report ROYAL BK SC-ADR (RBS): Free Stock Analysis Report CAPITAL ONE FIN (COF): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research