Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

JPMorgan Sued by NES Financial Over 2008 Sale of Business

JPMorgan Chase & Co. was sued by NES Financial Corp. for allegedly defrauding it in the purchase of a tax-related business, leaving NES with billions of dollars in potential liability.

NES Financial, in a complaint filed in federal court in Manhattan yesterday, claimed that JPMorgan improperly hid a “lengthy history of legal violations” when it sold its Section 1031 tax-deferred exchange business to NES in 2008.

“While NESF thought it was purchasing a business that would solidify its reputation for quality and trustworthiness, it received a business that saddled it with potentially massive liability,” the company claimed in its complaint.

As a result, NES Financial said, it is unable to raise capital from outside investors and its value dropped to $7 million from about $41 million before the sale.

NES Financial helps its clients avoid U.S. taxes by facilitating so-called 1031 exchanges, according to its website. Section 1031 of the U.S. Tax Code permits the owners of certain types of property used for business or investment to exchange them “for property of like kind,” without recognizing a loss or gain for tax purposes.

Jennifer Zuccarelli, a JPMorgan Chase spokeswoman, didn’t immediately return a phone message seeking comment on the suit.

The case is NES Financial Corp. v. JPMorgan Chase Bank NA, 11-cv-3437, U.S. District Court, Southern District of New York (Manhattan).

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.