(August 22, 2012) — A range of public pension funds based in the United States and Sweden are lead plaintiffs in a group lawsuit against JPMorgan Chase & Co. over trading losses in a credit derivative portfolio led by its London-based chief investment officer.
Swedish fund Sjunde AP-Fonden (AP7) along with five US public schemes, have alleged that they lost up to $52 million as a result of fraudulent activities caused by JP Morgan’s chief investment office and trader Bruno Iksil, also known as the ‘London Whale’.
US District Judge George Daniels decided to consolidate the swath of suits against the bank into one class action, naming the six pension funds as the lead plaintiffs, Bloomberg initially reported. The lead plaintiffs named include the Arkansas Teacher Retirement System, Ohio Public Employee Retirement System, School Employees Retirement System of Ohio, State Teachers Retirement System of Ohio, Oregon Public Employee Retirement Fund and AP7.
In July, Jamie Dimon, JP Morgan’s chief executive officer, said the firm had lost $5.8 billion due to a trading scandal.
The latest lawsuit against JP Morgan comes after the Louisiana Municipal Police Employees Retirement System sued the bank in November claiming breach of fiduciary duty by its directors. On August 2011, the bank agreed to pay the US Treasury $88.3 million to resolve violations of sanctions on Cuba, Iran, Sudan, and Liberia, along with measures aimed at thwarting the support of terrorism and the proliferation of weapons of mass destruction. In the complaint, the Louisiana Municipal Police Employees Retirement System asserted that the board “embraced or recklessly disregarded the company-wide business strategy based on repeated and systematic violations of federal law.”
“The misconduct occurred, unchecked, under the defendants’ watch because of their complicity in the improprieties alleged herein,” the pension fund said in the complaint. “Because of its acquiescence in the scheme, JPMC’s board cannot be disinterested and independent.”