Ohio Attorney General Mike DeWine filed a motion seeking to lead a proposed class-action lawsuit against JPMorgan Chase & Co. involving the activities of a U.K. trader known as the “London Whale.”
Ohio pension funds lost more than $27.5 million due to the alleged fraud, DeWine’s office said today in a statement. Spokesman Dan Tierney, speaking in a telephone interview, said the state is seeking lead plantiff status in the case because of “the size of the losses.”
Yesterday, JPMorgan Chase Chief Executive Officer Jamie Dimon said its chief investment office has had $5.8 billion in losses on the trades so far, and that figure may climb by $1.7 billion in a worst-case scenario. One trader, Bruno Iksil, amassed positions in credit derivatives so big and market-moving he became known as the London Whale.
Ohio said its pension fund managers were given “false and misleading information” that hid the true nature of the bank’s trades. The suit was filed on behalf of the Ohio Public Employee Retirement System, the School Employees Retirement System of Ohio and the State Teachers Retirement System of Ohio.
JPMorgan spokesman Joe Evangelisti declined to comment when reached via e-mail by Bloomberg News today.
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.
Four Class Actions
Ohio is seeking to lead a class action initiated by Louisiana, Tierney said, one of four class actions that have been filed.
Public pension funds in Oregon and Arkansas as well as a Swedish national pension fund are seeking to join the Louisiana lawsuit, the Ohio statement said.
In June, JPMorgan was sued by the Louisiana Municipal Police Employees Retirement System for alleged securities fraud tied to a trading loss of at least $2 billion. The state claimed the biggest U.S. bank and top officials misled investors about its risk management and financial condition from February 2010 to May 2012.
The case is Louisiana Municipal Police Employees Retirement System v. JPMorgan Chase & Co., 12-cv-4729, U.S. District Court for the Southern District of New York (Manhattan).