JPMorgan Chase & Co. was sued by a former employee seeking to represent participants in the bank’s retirement plan who lost money on company stock the plan held after the bank reported a $2 billion trading loss.
The complaint filed yesterday by Gregory Scrydloff in Manhattan federal court accuses New York-based JPMorgan of making misstatements about its financial health that allowed the company’s stock to trade at inflated prices between April 13, when the company reported earnings, and May 10, when Chief Executive Officer Jamie Dimon disclosed the trading loss.
Last week, an Arizona trust filed a securities-fraud lawsuit seeking to represent all investors who lost money on the stock as a result of alleged misstatements by the bank about its losses. In another case filed last week, an individual investor asked for damages on behalf of the company from Dimon, the bank’s board and other executives.
The trading losses came on synthetic credit products, which are derivatives tied to credit performance. In disclosing the $2 billion loss on transactions he said were intended to manage risk, Dimon cited “egregious” failures by the bank’s chief investment office.
Joseph Evangelisti, a JPMorgan spokesman, declined to comment on the most recent lawsuit.
The employee case is Scrydloff v. JPMorgan Chase & Co., 12-4027, U.S. District Court, Southern District of New York (Manhattan). The earlier cases are Baker v. Dimon, 12-cv-03878, and Saratoga Advantage Trust -- Financial Services Portfolio, 12-cv-03879, U.S. District Court, Southern District of New York (Manhattan).