Former brokerage client files class action against JPMorgan

August 1, 2012 by

A former brokerage client has sued JPMorgan Chase & Co. for allegedly steering him and other investors to overpriced, underperforming funds to boost the bank’s fees and profits.  According to the complaint, JPMorgan falsely represented its financial advisers were operating under fiduciary duty to clients, while its bonuses encouraged the sale of proprietary funds.  The complaint seeks class action status.

The lawsuit, filed in New York State Supreme Court in Manhattan, follows a report about JPMorgan’s practices published on July 2 by the New York Times.

According to the lawsuit, JPMorgan’s marketing materials highlighted “inflated, hypothetical returns,” while suppressing a “much less rosy” picture of performance.

According to the complaint, JPMorgan, the largest U.S. bank, turned to proprietary funds and investments to make up for declining profits after the housing boom burst.  The strategy allowed JPMorgan to collect double fees for management and sales, it said.

The complaint also alleges that the U.S. Securities and Exchange Commission, Financial Industry Regulatory Authority and Manhattan District Attorney are among those investigating JPMorgan’s sales practices.

The case is Alan H. Tralins v. JPMorgan Chase & Co., New York State Supreme Court, No. 652448/2012, New York County.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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