JPMorgan shareholders 'can sue' over London Whale
Tuesday 01 April 2014
A US judge has ruled shareholders can can sue JPMorgan Chase for securities fraud over the activities of the “London whale” trader.
The US bank lost $6.2 billion (£3.7 billion) as a result of the scandal linked to trades made by Bruno Iksil from the London-based chief investment office.
District Judge George Daniels in Manhattan said shareholders could pursue claims that chief executive Jamie Dimon and former chief financial officer Douglas Braunstein hid increased risks the office had been taking early in 2012, according to Reuters.
But he dismissed an action brought against bank’s directors and another brought by employees over losses made by investing in the bank’s stock in their pensions.
The judge said shareholders could press head with their claims that they were misled on the April 2012 earnings call when Dimon made the memorable quote. It related to a portfolio of “synthetic” credit that Iksil managed. They also allege that the bank materially understated its “value at risk”.
Last September the US giant was hit with $920 million (£550 million) in fines, including £138 million from Britain’s Financial Conduct Authority.
Iksil and colleagues departed the bank in the wake of the scandal as did their boss Ina Drew, who had been one of Wall Street’s most powerful women.
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