U.S. District Judge George Daniels in Manhattan ruled today that lawsuits against the New York-based bank should be consolidated into a class action. The pension funds allege they lost as much as $52 million because of fraudulent activities by JPMorgan’s London chief investment office.
The lead plaintiffs named by Daniels are the Arkansas Teacher Retirement System, Ohio Public Employee Retirement System, School Employees Retirement System of Ohio, State Teachers Retirement System of Ohio, Oregon Public Employee Retirement Fund and the Swedish pension fund Sjunde AP-Fonden.
“The public pension funds, a group which includes some of the largest public pension funds in the world, have far and away the ‘largest financial interest’ in the relief sought by the class in these cases,” Gerald Silk, a lawyer with Bernstein Litowitz Berger & Grossmann LLP, said Aug. 9 in court papers.
JPMorgan Chief Executive Officer Jamie Dimon said in July the firm’s chief investment office had $5.8 billion in losses on the trades so far, and the figure may climb by $1.7 billion in a worst-case scenario. Iksil amassed positions in credit derivatives so big and market-moving he became known as the London Whale.
The pension funds allege they sustained losses after being given false information that hid the nature of the bank’s trades.
Joe Evangelisti, a JPMorgan spokesman, declined to comment on the judge’s ruling.
Class-action status allows plaintiffs more leverage in negotiations with defendant banks. Lead plaintiffs direct the litigation on behalf of the class, determining strategy while usually reaping the largest share of any verdict or settlement.
The case is In Re: JPMorgan Chase & Co. (JPM) Securities Litigation, 12-cv-3852, U.S. District Court, Southern District of New York (Manhattan).
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