Swedish, US Pensions Lead 'London Whale' Lawsuit

JP Morgan provided false information, hiding the real nature of the trades that caused a colossal trading loss at the bank, a group of pension funds have alleged.

(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.

Want the latest institutional investment industry
news and insights? Sign up for CIO newsletters.

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.”

Pensions’ Fifty Favorite Hedge Funds

A list of the 50 hedge funds managing the most pension assets, courtesy of Towers Watson.

(August 22, 2012) – What are the most popular hedge funds among pension investment teams worldwide? 

Towers Watson knows, and sent aiCIO a list. Here’s a ranking of the top 50, and the total amount of pension assets each one manages as of December 31, 2011. 

1. Bridgewater Associates (US) – $47.3 billion 

2. BlackRock (UK) – $14.9 billion 

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

3. Brevan Howard (UK) – $11.5 billion 

4. Angelo, Gordon & Co. (US) – $8.6 billion 

5. BlueCrest Capital Management Group (UK) – $8.6 billion 

6. Och-Ziff Capital Management (US) – $8.05 billion 

7. AQR Capital Management (US) – $6.7 billion 

8. GoldenTree Asset Management (US) – $5.7 billion 

9. Beach Point Capital Management (US) – $4.89 billion 

10. D. E. Shaw Group (US) – $4.32 billion 

11. Nephila Capital (Bermuda) – $4.28 billion 

12. PIMCO (US) – $4.24 billion 

13. AHL (UK) – $4.21 billion 

14. Winton Capital Management Ltd. (UK) – $4.18 billion 

15. Lansdowne Partners (UK) – $4.05 billion 

16. Anchorage Capital Group (US) – $3.02 billion 

17. Goldman Sachs Asset Management (US) – $2.6 billion 

18. GE Asset Management (US) – $2.48 billion 

19. Odey Asset Management (UK) – $2.36 billion 

20. UBS Global Asset Management (UK) – $2.34 billion 

21. Magnetar Capital (US) – $2.2 billion 

22. Omega Advisors (US) – $2 billion 

23. COMAC Capital (UK) – $1.91 billion 

24. Graham Capital Management (US) – $1.77 billion 

25. Transtrend (The Netherlands) – $1.72 billion 

26. Aspect Capital (UK) – $1.52 billion 

27. HBK Capital Management (US) – $1.51 billion 

28. Black River Asset Management (US) – $1.49 billion 

29. New Mountain Vantage Advisors (US) – $1.47 billion 

30. Gramercy (US) – $1.3 billion 

31. Arrowgrass Capital Partners (Cayman Islands) – $1.29 billion 

32. GLG (UK) – $1.26 billion 

33. Bain Capital (US) – $1.25 billion 

34. Ascend Capital (US) – $1.23 billion 

35. Wellington Hedge Management (US) – $1.22 billion 

36. Ivory Investment Management (US) – $1.2 billion 

37. Pine River Capital Management (Cayman Islands) – $1.08 billion 

38. Fir Tree Partners (US) – $1.06 billion 

39. Elm Ridge Management (US) – $1 billion 

40. Perry Capital (US) – $890 million 

41. Mazi Capital (South Africa) – $747 million 

42. Lucidus Capital Partners (UK) – $650 million 

43. Knighthead Capital Management (US) – $550 million 

44. Aviva Investors (UK) – $534 million 

45. Ramius (US) – $483 million 

46. BlueBay Asset Management (UK) – $466 million 

47. Fore Research & Management (US) – $379 million 

48. Highline Capital Management (US) – $378 million 

49. Invesco (US) – $352 million 

50. Lombard Odier Investment Management (Switzerland) – $337 million 

Pension assets make up a large portion of total capital under management for the funds topping this list. Bridgewater, the world’s largest hedge fund, earns that distinction mostly thanks to pension investments. The Connecticut-based fund manages a total of $76.1 billion, 62% of which belongs to pensions. Over half (54%) of BlackRock‘s $27.6 billion in total assets come from pensions, as do one-third of Brevan Howard’s. Further down the list, a handful of other funds owe similarly high portions of their capital to pensions, including AQR (48%), Beach Point (80%), Nephila (78%), GE Asset Management (100%), and Gramercy (87%).

In total, these 50 funds manage $187.57 billion in pension assets, representing 35.8% of the funds’ total assets under management ($524.09 billion). Towers Watson compiled this list using data largely from investment managers, in addition to funds’ public financial statements and a HedgeFund Intelligence publication.

«