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Church Sues JPMorgan for Bad Investments

Church Sues JPMorgan for Bad Investments

Christ Church Cathedral in Indianapolis recently filed a lawsuit against JPMorgan Chase & Co., alleging that the bank caused the church’s trusts to lose about $13 million in value because of JPMorgan’s decision to purchase 177 investment products. According to the church, the products produced the highest revenues for the bank to the detriment of the church.

The products in question included private equity and hedge funds, managed accounts, cash sweep accounts and mutual funds that had so many expenses and fees, their failure to perform was inevitable between 2004 and 2013.

According to the complaint filed in the U.S. District Court in Indianapolis, JPMorgan’s proprietary products comprised between 68 and 85 percent of the church’s investment portfolio.

The complaint also alleges that the church’s assets declined from $39.2 million before 2008 to $31.6 million in 2013, and that the firm earned millions by cross-selling investment products.

The suit came in the wake of news reports that cited anonymous sources which alleged that the Securities and Exchange Commission is investigating JPMorgan’s subsidiaries for possible conflicts of interest in its mutual fund sales.

Founded in 1837, Christ Church Cathedral is a beneficiary of the family fortune of pharmaceutical giant Eli Lilly & Co. The church was a client of JPMorgan and its Private Wealth Management division.

Scott Starr, trust and securities lawyer at Starr Austen & Miller LLP, says, “Financial advisors and companies handling investments have a fiduciary duty to act in the best interests of their clients. In this case, JPMorgan allegedly failed to do so.” Starr and his firm has handled numerous cases involving bank trust departments breaching their fiduciary duties to their trust customers by making poor investment decisions, not properly diversifying the trust portfolio, or self-dealing and conflicts of interests.

The team of investment fraud lawyers at Starr Austen & Miller LLP handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence, broker churning, breach of trust, as well as malpractice.

Source: Investment News