JPMorgan hit with shareholders lawsuit over loss
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(AP Photo/Frank Franklin II)
NEW YORK — US fund manager Saratoga Capital Management, filed a class-action lawsuit against JPMorgan Chase Wednesday after the nation’s largest bank lost more than $2 billion in derivatives trading.
The suit accuses the bank, Jamie Dimon, chief executive and chairman; and Douglas Braunstein, chief financial officer, of fraudulently hiding massive derivatives bets that resulted in the huge loss.
“This action arises out of the materially false and misleading statements and omissions” that Dimon and Braunstein made in an April 13 earnings conference call with investors, Saratoga said in its court filing.
The suit said the economic loss suffered by the plaintiffs was “a direct result of defendants’ fraudulent scheme to artificially inflate the price of JPMorgan common stock and the subsequent significant decline in the value of JPMorgan common stock when defendants’ prior misrepresentations and other fraudulent conduct were revealed.”
JPMorgan shares fell nearly 11 percent between the announcement of the loss late Thursday and the end of trade Tuesday.
“We are actually suing on behalf of one of our mutual fund portfolios,” said Saratoga chairman and chief executive Bruce Ventimiglia, in an email to AFP.
“We’re asking the judge to certify the action as a class action on behalf of all shareholders who purchased the stock,” he said.
Saratoga Advantage Trust — Financial Services Portfolio filed the lawsuit in the US district court in New York.
The suit focused on the conference call, in which Dimon and Braunstein downplayed news reports the Wall Street was betting massive amounts in risky trading. Dimon called the reports a “complete tempest in a teapot.
But on Thursday after the stock markets closed, JPMorgan Chase disclosed it had lost $2 billion in complex derivatives trading in the six weeks from April 1, and said there was a possibility of another $1 billion in related losses by the end of June.
On Wednesday, JPMorgan shares were down another 0.4 percent at $36.10 in midday trade.
