JPMorgan Chase & Co. (JPM) will pay $150 million to resolve investor claims accusing the firm of concealing up to $6.2 billion in losses caused by the trader Bruno Iksil, who was given the nickname “London Whale.” Pension funds filed a class action securities case accusing the firm of using its investment office in London as a secret hedge fund. According to the plaintiffs, the bank told them that the office was managing risk when what it was actually doing was making trades for profit. Investors were harmed when huge losses resulting from transactions made through the London office caused the bank’s share price to drop.
The pension funds said that they suffered tens of millions of dollars of losses because fund managers were provided with information that was “false and misleading.” They also believe that the bank knowingly concealed the growing risks that were occurring at the London office.
Plaintiffs of this lawsuit include the Ohio Public Employees Retirement System, which says it lost $2.5 million, the Arkansas Teacher Retirement System, the state of Ohio, funds in Arkansas, Swedish pension fund AP7, and other JP Morgan shareholders that purchased stock between 2/24/10—this is when the company submitted to regulators its 2009 earnings report—and 5/21/12. The latter date is when the firm announced that it was stopping a $15 billion share buyback program until it could get a better handle of the losses sustained.
Earlier this year, U.K. regulators decided not to go after Iksil. In the U.S., in exchange for his cooperation, he signed a non-prosecution deal. His ex-supervisor, Javier Martin-Artajo and trader Julien Grout have been indicted for allegedly hiding the extent of the losses from JP Morgan Management.
Already JPMorgan has paid over $1 billion to resolve US and British investigations over the London Whale losses. It also publicly admitted to wrongdoing.
If you suspect your losses are due to pension fund fraud, contact The SSEK Partners Group today.