JPMorgan Investors Told They Cannot Sue Investment Bank Over $6 Billion London Whale Loss

Financial holding company also slapped with more than 340 million fines for forex rigging.

JPMorgan Investors Told They

JPMorgan Chase & Co. (NYSE:JPM) investors have been told by the Delaware Chancery Court, headed by Judge Sam Glasscock, that they cannot sue the top executives, including chief executive, Jamie Dimon, over the investment bank’s approximately $6 billion London Whale loss.

The financial service bank’s shareholders have accused the US lender’s board for not doing enough to stop the trader Bruno Iksil (London Whale), from making huge bets that have resulted in a loss of billions of dollars from transactions the financial markets.

The court stated in its detailed order that JPMorgan executives already possess adequately trained and supervised traders, which two other US courts had also found.

Since Mr. Iksil has been cooperating with US authorities over the issue, he has not been charged, as he discharged information with full honesty. However, his former boss, Javier Martin-Artajo, and a junior trader, Julien Grout, were slapped with charges on five counts each, including conspiracy and financial securities fraud.

Attempts by US prosecutors to have the two accused extradites hit a roadblock, with Spain refusing to extradite Martin Araujo, and France unable to do so due to there being no extradition treaties.

Meanwhile, in a statement from the Justice Department, JPMorgan has pleaded guilty for being involved in a single antitrust violation, and has been fined more than $340 million to the Federal Reserve, on top of the $550 million to be paid from the proportion of involvement  from July 2010 through January 2013. Like in London Whale’s case, it was due to the involvement of multiple traders and their accomplices, who have been dismissed from the company

No details were provided as to how many workers were involved in the case, but based on their ongoing probe, close to 20 people have been rounded up and their activities have costed taxpayers almost $6 billion.

Following the ruling, JPMorgan’s CEO, Jamie Dimon, made a statement, in which he expressed his disappointment over the government’s strong case of involvement of the bank’s employees and their conduct  of even a small number of workers, or even a single worker, which is going to have very strong ramifications for the entire banking industry. When that happens, says Dimon, they have to hear from multiple regulators, giving them sleepless nights from endless questions from authorities.

JPMorgan stock price ended the day at $66.65, a gain of 0.26% the previous day, despite the ruling outcome.


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