JP Morgan's $1.7 billion Madoff payout was painful enough for investors. But it came with a sting in the tail.

The bank's securities filing Tuesday discussing the deferred prosecution agreement related to criminal violations involving work for convicted Ponzi schemer Bernard Madoff contained an interesting disclosure. The agreement, along with other payments JP Morgan would make to regulators, would result in a $400 million increase in litigation reserves for the fourth quarter of 2013.