Stoll Berne, along with co-counsel Bernstein Litowitz Berger & Grossmann LLP, Grant & Eisenhofer PA, and Kessler Topaz Meltzer & Check LLP, has filed for class certification in its case against JPMorgan Chase & Co. Stoll Berne and co-counsel represent hundreds of thousands of shareholders who were allegedly harmed by the bank’s “London Whale” trading disaster.
The complaint alleges that in 2012, JPMorgan’s Chief Investment Office (“CIO”), which purportedly managed risk for the company as a whole, was secretly engaged in proprietary trading for its own account. According to government investigators, instead of cautiously managing risk, the CIO took massive positions in risky derivatives and lost over $6 billion as a result. The plaintiffs allege that JPMorgan and its officers never warned investors that a substantial component of the CIO exposed the company to billions of dollars in losses. To the contrary, when asked about these investments JPMorgan’s CEO, Jamie Dimon, told the investing public that it was all a “tempest in a teapot.”
Plaintiffs seek certification of a class of investors who bought JPMorgan stock from February 13, 2012, through May 21, 2012. Plaintiffs assert the fraud-on-the-market doctrine, which provides a presumption of reliance in cases where material information about a publicly traded company affects the price of a company’s stock. Because the alleged misrepresentations here by Mr. Dimon were public statements addressed to investors and to the marketplace as a whole, purchasers of JPMorgan stock were entitled to rely on those statements and the integrity of the market price of the company’s common stock.
JPMorgan has reportedly settled numerous government claims related to this scandal. In 2013, JPMorgan agreed to pay approximately $1 billion in total to the Securities and Exchange Commission, the Federal Reserve, the Office of the Comptroller of the Currency, the Commodity Futures Trading Commission, and the United Kingdom Financial Conduct Authority.