Class action filed against JPMorgan Chase

Posted on: July 26th, 2012 by Steve Larson

A class action lawsuit was filed on July 13, 2012 in the Supreme Court of the State of New York against JPMorgan Chase & Co. (JPMorgan). JPMorgan, unbeknownst to its customers, has directed its clients into its own JPMorgan funds even when those funds were not suitable investments. JPMorgan did so to earn increased fees at the expense of their clients. As a result of Defendant’s conduct, the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Manhattan district attorney, and officials in New Jersey and Delaware are investigating Defendant’s sales practices. All current or former JPMorgan clients who invested in JPMorgan mutual funds from January 1, 2007 through the present are eligible to participate in the suit.

The lawsuit seeks to recover (1) all fees paid to JPMorgan in connection with purchases of JPMorgan’s proprietary funds and investments, (2) all ongoing management fees collected by JPMorgan on client portfolios that contained positions in JPMorgan proprietary funds and investments, (3) all other fees that JPMorgan received as a results of its clients’ investments in JPMorgan proprietary funds and investments, and (4) compensatory, consequential, and punitive damages recoverable at law, equity, or under N.Y. GBS Law Sections 349 and 350.

It is unclear how the lawyers for the putative class are going to get around the arbitration clauses that JPMorgan typically includes in its brokerage agreements.