Chase Shareholder Can’t Sue Jamie Dimon

By ADAM KLASFELD

MANHATTAN (CN) – A JPMorgan Chase shareholder jumped the gun in filing a derivative lawsuit against CEO Jamie Dimon in connection with “six recent, high-profile settlements with government agencies and private litigants arising out of allegations of egregious misconduct,” a federal judge ruled Wednesday.

Shareholder Chaile Steinberg accused Dimon and 14 other current and former board members and corporate officers of an “unprecedented course of reckless and unlawful conduct in order to increase their own personal fortunes.”

Jamie Dimon,  CEO of JPMorgan Chase
Jamie Dimon, CEO of JPMorgan Chase (Photo credit: jurvetson)

U.S. District Judge Paul Crotty summarized the six settlements that Steinberg’s lawsuit cited in a 10-page opinion dismissing that case.

According to the Opinion and Order, they were:

“(1) a July 2013 settlement with the Federal Energy Regulatory Commission regarding alleged manipulative bidding in the electricity market,

“(2) a 2013 investigation by the Securities and Exchange Commission into a hiring program under which certain positions were allegedly given to family members of Asian business owners and officials (the ‘Sons and Daughters Program’)

“(3) a September 2013 settlement with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency regarding billing practices and allegedly erroneous documents filed in delinquent debtor lawsuits,

“(4) a December 2013 settlement with European Union regulators regarding alleged manipulation of the London Interbank Offered Rate,

“(5) a January 2014 deferred prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York (‘USAO’) relating to Bernard L. Madoff Investment Securities LLC, and

“(6) 2013 settlements of private litigation arising out of the origination and securitization of residential mortgage-backed securities.” (Citations omitted.)

Since 2009, JPMorgan Chase has paid nearly $32 billion in penalties; Steinberg sought damages for the payments the bank made.

Although Steinberg never made a demand upon the Chase board before filing his lawsuit, he claimed doing so would have been futile.

Disagreeing, Crotty wrote that Steinberg “fails to demonstrate bad faith based on the existence of ‘red flags.'”

http://www.courthousenews.com/2014/07/18/69614.htm

Author: Ralph Turchiano

In short, I review clinical research on an almost daily basis. What I post tends to be articles that are relevant to the readers in addition to some curiosities that have intriguing potential. As a hobby, I truly enjoy the puzzle-solving play that statistics and programming as in the python language bring to the table. I just do not enjoy problem-solving, I love problem-solving and the childlike inspiration and exploration of that innocent exhilaration of discovering something new. Enjoy ;-)

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