JPMorgan Chase & Co scored victory in court today after US District Judge George Daniels dismissed the lawsuit filed on behalf of the bank's former and current employees over the losses the latter had in the retirement accounts. Bloomberg said the complainants claimed that the losses were allegedly incurred from the $6.2 billion "London Whale" trading debacle. Bruno Iksil, the London-based trader from the bank's Chief Investment Office, made illegal trades resulting to a $6.2 billion or £3.7 billion absorbed by the US bank.
According to the bank's employees in the lawsuit, their employer has made incorrect statements about its financial health from January to April 2012, subsequently allowing its stock to trade at inflated prices. They argued that they lost money when JPMorgan publicly disclosed its losses stemming from the "London Whale" scandal through the retirement plan. Bloomberg said that the employees in the lawsuit had participated in JPMorgan's retirement plan, which had made investments in the bank.
JPMorgan Chairman and Chief Executive Officer Jamie Dimon earlier had cited failures by JPMorgan's chief investment office that resulted to the company's billion-dollar loss. It was discovered that the trading losses resulted from the trading of synthetic credit products, which are speculative assets tied to credit performance. Daniels is reportedly overseeing the lawsuits filed against the New York-based firm which are linked to the trading losses caused by Bruno Iksil and its chief investment office.
Despite the victory, The Irish Independent said that JPMorgan will be facing a barrage of complaints filed by the bank's shareholders after Daniels allowed any civil action from JPMorgan shareholders to move forward. As such, it is expected that the lawsuits from the shareholders will be in the multimillion-dollar range.
The bank has been financially hit not only from its own employees and shareholders, but from regulators as well in the wake of the "London Whale" scandal. The Irish Independent said that last September, JPMorgan was hit with a total of $920 million or £550 million in fines, including £138 million fine imposed by Britain's Financial Conduct Authority.
