JPMorgan Shareholders Sue Dimon Over $2 Billion Loss (Update 1)
By Bob Van Voris - May 16, 2012 10:12 AM ET
JPMorgan Chase & Co. (JPM) shareholders sued the bank and Chief Executive Officer Jamie Dimon in two separate suits over the company’s $2 billion trading loss.
A securities-fraud lawsuit filed by an Arizona trust seeks damages on behalf of all investors who bought the bank’s stock between April 13 and May 10. A second case, brought by an individual investor, seeks damages on behalf of the company against Dimon, the bank’s board and other executives. Both suits were filed late yesterday in Manhattan federal court.
“Defendants misrepresented the losses and risk of loss to the company arising from massive bets on derivative contracts related to credit indexes reflecting interest rates on corporate bonds,” according to the complaint filed by Saratoga Advantage Trust – Financial Services Portfolio. “These derivative bets went horribly wrong, resulting in billions of dollars in lost capital for the company and billions more in lost market capitalization for JPMorgan shareholders.”
Dimon disclosed the $2 billion trading loss to investors May 10. New York-based JPMorgan is the biggest and most profitable U.S. bank. Joseph Evangelisti, a JPMorgan spokesman, didn’t immediately return a phone message seeking comment on the lawsuits.
The 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).
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