JPMorgan Chase hit with class-action lawsuit over $2B in trading losses
By Jia Lynn Yang, Published: May 16
A class-action lawsuit was filed Tuesday against JPMorgan Chase on behalf of investors accusing the bank of misleading shareholders about the $2 billion in trading losses that have roiled the company this week.
Lawyers said the bank did not fully disclose the risky nature of JPMorgan’s trades. The lawsuit alleges the bank falsely told shareholders that its bets on financial instruments known as derivatives were “hedges” that would help the firm offset overall risk in its portfolio. Instead, lawyers say, the bank was betting purely for profit and did not fully disclose how much money the bank had already lost before by the time it held an April 13 conference call with investors.
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Sen. Bob Corker, a Republican who serves on the Senate Banking Committee, has called for a hearing on the $2-billion trading loss by JP Morgan, saying that "policies are going to be derived out of what's happened."
The result was that JPMorgan’s stock price traded at “artificially inflated prices,” the lawsuit alleges.
