Pension fund shareholder suit against Dimon, JPMorgan Chase board fails

A federal judge has rejected a case brought forth by shareholders against JPMorgan Chase CEO Jamie Dimon and the bank’s board. They alleged negligence regarding warning signs associated with the bank’s infamous former client, Jeffrey Epstein.

In a ruling Wednesday, U.S. District Judge Jed Rakoff noted that the shareholders, represented primarily by pension funds from Miami and Pittsburgh, did not approach the bank’s board with their worries, nor did they demonstrate that such an approach would be pointless.

The judge from Manhattan promised to detail his rationale at a later date. Rakoff chose not to delve into specifics concerning the major U.S. bank’s ties with Epstein.

In August 2019, Epstein took his own life in a New York detention center as he awaited trial on charges of sex trafficking.

There was no immediate feedback from the legal team representing the shareholders.

Dimon, along with seven directors and Jes Staley, once responsible for private banking and investments, were blamed for turning a blind eye when Epstein utilized his accounts for the exploitation of young females.

The litigation in question aimed to get the named parties or their insurance carriers to compensate JPMorgan on behalf of its shareholders. JPMorgan is already claiming up to $175 million against some of its insurers over its reps and warranties on a relatively recent purchase.

In addition, Rakoff supervises a pair of Epstein-associated cases against JPMorgan presented by the U.S. Virgin Islands, where Epstein possessed two adjacent isles, as well as from Epstein survivors.

The U.S. Virgin Islands has put forth a claim of at least $190 million, while a settlement proposal of $290 million with those affected is in the final stages of court review.

In relation to the lawsuits, JPMorgan is taking legal action against Staley. Though he’s expressed remorse over his association with Epstein, he’s denied any knowledge of Epstein’s illicit activities.

Staley had previously held the position of Barclays’ CEO from 2015 to 2021.

The lawsuit is  City of Miami General Employees & Sanitation Employees Retirement Trust and others against Dimon and colleagues, U.S. District Court, Southern District of New York, No. 23-03903.

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