JPMorgan Chase & Co. (JPM) was accused in a lawsuit of manipulating clients’ foreign-exchange transactions for its own benefit.
The Louisiana Municipal Police Employees’ Retirement System filed a complaint yesterday in Manhattan federal court alleging that the bank took advantage of investors by causing them to pay what were often the worst currency rates available on a given trading day.
“JPMorgan’s scheme allowed it, in violation of its contractual and fiduciary obligations, to extract hundreds of millions of dollars in illicit risk free profits from its clients under the guise of FX trading,” according to the complaint.
JPMorgan, the largest bank in the U.S. by assets, recorded more than $4 billion in foreign exchange revenue between 2005 and 2011, according to the complaint.
The pension fund, which is suing on behalf of other institutional investors for which the New York-based bank executed currency trades since 2005, is seeking damages, punitive damages and disgorgement of profits.
A JPMorgan spokeswoman, Jennifer Zuccarelli, didn’t immediately return a call seeking comment on the lawsuit.
The case is Louisiana Municipal Police Employees’ Retirement System v. JPMorgan Chase & Co., 12-cv-6659, U.S. District Court, Southern District of New York (Manhattan)
To contact the reporter on this story: Christie Smythe in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com