May 22, 2012 (PLANSPONSOR.com) – A former J.P. Morgan Chase & Co. employee is suing the
firm on behalf of retirement plan participants who lost money investing in the
company’s stock after the bank reported a $2 billion trading loss.
Bloomberg reports Gregory Scrydloff accuses J.P. Morgan of making misstatements about its financial health that allowed the company's stock to trade at inflated prices between April 13, when the company reported earnings, and May 10, when Chief Executive Officer Jamie Dimon disclosed the trading loss.
The trading losses came on synthetic credit products, which are derivatives tied to credit performance. In disclosing the $2 billion loss on transactions he said were intended to manage risk, Dimon cited "egregious" failures by the bank's chief investment office.
According to Bloomberg, last week, an Arizona trust filed a securities-fraud lawsuit seeking to represent all investors who lost money on the stock as a result of alleged misstatements by the bank about its losses. In another case, an individual investor asked for damages on behalf of the company from Dimon, the bank's board and other executives.