Federal judges allows pension lawsuit against JPMorgan to continue Matthew Pomy at 10:30 AM ET
[JURIST] Judge Katherine Forrest of the US District Court for the Southern District of New York [official website] on Wednesday denied a motion to dismiss a lawsuit brought by a pension plan against JPMorgan Chase (JPM) [corporate website; JURIST news archive]. The lawsuit alleges that JPM engaged in risky business practices in investing in Lehman Brothers in a way that violated securities loan agreement between the parties. The pension plan entered into the securities agreement in 2005 and argue the agreement was violated because JPM did not invest conservatively. Forrest found that the pension plan raised "sufficient allegations to support a claim for breaches of both the duty of care and the duty of loyalty." Because of this, Forrest ruled that the case must forward after it had been delayed at the pleading stage for three years. A conference is scheduled for April 10 to move forward with discovery.
JPMorgan has faced numerous lawsuits regarding its business practices. In January it was revealed that several US regulators were planning on issuing a cease-and-desist [JURIST report] order to JPM. Earlier in January the National Credit Union Administration (NCUA) [official website] filed [JURIST report] a lawsuit against JPM for the sale of $2.2 billion of faulty residential mortgage-backed securities (RMBS) to credit unions. In December the NCUA brought a suit [JURIST report] against JPMorgan for RMBS products sold by Bear Stearns, which was also subsequently purchased by JPM. In July JPM agreed to a $100 million settlement [JURIST report] in a suit brought by customers claiming unreasonable fees and a three percent increase on monthly minimum payments by credit card holders. In early June the firm was granted [JURIST report] permission to pay $44.6 million to resolve allegations of fraudulent bidding practices for state and local government investment securities at taxpayers' expense.
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