JP Morgan Chase Bank, N.A.
On January 23, 2009, Plaintiff, Board of Trustees of the AFTRA Retirement Fund, filed a Class Action Complaint on behalf of the Class, participants in Defendant’s securities lending program, who incurred losses relating to investments in medium-term notes of Sigma Finance, Inc.
Nix Patterson & Roach represents AFTRA and the proposed class with Barroway, Topaz, Kessler, Meltzer & Check, L.L.P.
Through an Amended Class Action Complaint filed on April 23, 2009, Plaintiff expanded the Class to include ERISA plans that participated in Defendant’s securities lending program and that directly invested in medium-term notes of Sigma Finance, Inc.
Each member of the proposed class, including the AFTRA Plan, was a party to a substantially similar securities lending agreement with JPMorgan. Pursuant to these Securities Lending Agreements, Defendant loaned securities owned by Class Members to third-party borrowers in return for cash collateral; defendant then invested, at its sole discretion, the cash collateral in an effort to earn an investment return on the cash collateral in excess of the rebate paid to the third-party borrowers.
In return for the loaned securities, the AFTRA Plan and Class Members received cash from the borrowed in an amount exceeding the market value of the loaned securities. As compensation, Defendant received a percentage of the revenues generated for each Class Member. Each of the Securities Lending Agreements required Defendant, among other things, to (a) safeguard principal, (b) maintain adequate liquidity, and (c) discharge its duties with respect to the investment of collateral with care, skill, prudence, and diligence.
Despite these objectives and duties, Defendant invested and lost a substantial portion of the cash collateral provided to Class Members in medium-term notes issued by Sigma Finance, Inc.
AFTRA brought this action on behalf of the AFTRA Plan and similarly situated investors throughout the country that were subject to, and affected by, JPMorgan’s conduct in the same manner. Plaintiff alleges that JPMorgan, having undertaken a fiduciary role with respect to the AFTRA Plan and members of the Class, breached its duties of prudence, loyalty, and exclusive purpose under ERISA § 404(a), as well as contractual and common law fiduciary duties.
Plaintiff seeks losses to these plans for which JPMorgan is liable pursuant to common law and ERISA §§ 409 and 502(a)(2), 29 U.S.C. §§ 1109 and 1132(a)(2). Additionally, Plaintiff seeks other equitable relief from JPMorgan, including, without limitation, injunctive relief and, as available under applicable law, constructive trust, restitution, equitable tracing and other monetary relief.
Additional information and case updates can be found at:
If you have any questions regarding this litigation, please contact Brad Beckworth or Brad Seidel at 903-645-7333.
Class Period: 01.01.07 -
View Class Action Complaint
View Amended Class Action Complaint
View Order Appointing Interim Lead Counsel