JP Morgan hit by two investor lawsuits over $2bn trading loss
JP MORGAN has been hit by two separate lawsuits from shareholders accusing it of excessive risk-taking following last week’s revelation of a $2bn trading loss due to a “failed hedge strategy”.
Jamie Dimon, JP Morgan’s chairman and chief executive, and Douglas Braunstein, the bank’s finance director, are accused of breaching fiduciary duty to investors and wasting corporate assets in a suit filed in New York by Californian shareholder James Baker. In a second lawsuit filed by asset management firm Saratoga, the firm is accused of making “materially false and misleading statements and omissions” about the trades when asked about them by analysts in April. At the time, Dimon described them as a “tempest in a teapot.”
“Defendants misrepresented the losses and risk of loss to the company,” the complaint said.
The lawsuits were filed as it emerged that the bank’s asset management division had been betting against the position taken by its chief investment office, exacerbating the $2bn loss.
JP Morgan declined to comment.