The securities attorneys in Morgan & Morgan’s New York office have filed a class action lawsuit against James Dimon, who is the CEO, President, and Chairman of the Board of Directors of JPMorgan Chase, alleging that Mr. Dimon and the other members of the bank’s Board of Directors allowed JPMorgan to embark on an unprecedented course of recklessness and unlawful conduct to increase their own personal fortunes.
Since 2009, JPMorgan has paid nearly $32 billion in settlements, fines, and penalties to law enforcement agencies and federal regulators for a wide variety of illegal and criminal behavior. The class action lawsuit describes a number of high-profile scandals involving the once-revered Wall Street bank.
For example, in July of 2013 JPMorgan paid $410 million to settle allegations that the bank manipulated wholesale electricity prices for several years, resulting in inflated energy bills for millions of households. In addition, the bank allegedly engaged in unfair billing practices for credit card “add-on products” by charging customers for credit monitoring services that they did not receive.
Furthermore, reports have surfaced that the Federal Bureau of Investigation and Securities and Exchange Commission are investigating whether JPMorgan violated the Foreign Corrupt Practices Act by creating a hiring program intended to offer jobs to over 250 sons and daughters of politically connected families in Asia.
As alleged in the lawsuit, JPMorgan offered well-paying jobs to applicants with ties to Chinese Communist Party officials or state-owned companies, including the daughter of the deputy minister of propaganda, a relative of a Chinese financial regulator, and the nephew of the executive chairman of a state-owned trucking company. JPMorgan allegedly created a recruitment program to “hire the children of China’s ruling elite” to help the bank win business deals in China. The Foreign Corrupt Practices Act bans United States companies from giving “anything of value” to a foreign official to win an improper advantage in retaining business.
As recently reported by the New York Times, Mr. Dimon personally interviewed a family friend of a high-level Chinese regulator to potentially help the bank with several business deals it was working on with Chinese insurance companies.
According to the class action complaint, Mr. Dimon earned in excess of $130 million from 2005 through 2012. The lawsuit is seeking disgorgement of all illicit profits generated as a result of the bank’s unlawful conduct, as well as an order requiring JPMorgan to enact proper internal control procedures to prevent such fraudulent and illegal conduct from occurring in the future.
Stay tuned here for updates as this lawsuit progresses.