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Compliance May 22, 2012
JPMorgan Chase Sued for Retirement Plan Losses
A former JPMorgan
Chase & Co. employee is suing the firm on behalf of retirement plan
participants who lost money after the bank reported a $2 billion trading loss.
Reported by Rebecca Moore
Gregory Scrydloff accused JPMorgan Chase of making misstatements about its financial health that allowed the company’s stock to trade at inflated prices between April 13, when the company reported earnings, and May 10, when Chief Executive Jamie Dimon disclosed the trading loss, Bloomberg News Service reported.
The trading losses came on synthetic credit products, which are derivatives tied to credit performance. In disclosing the $2 billion loss on transactions he said were intended to manage risk, Dimon cited “egregious” failures by the bank’s chief investment office.
An Arizona trust filed a securities-fraud lawsuit last week seeking to represent all investors who lost money on the stock as a result of alleged misstatements by the bank about its losses, according to Bloomberg. In another case, an individual investor asked for damages on behalf of the company from Dimon, the bank’s board and other executives.