Ohio Attorney General Mike DeWine announced a $150 million settlement in a class-action lawsuit with JP Morgan Chase & Co. over losses incurred by the bank’s investors, including the Ohio Public Employees Retirement System.
The suit, filed in July 2012, alleged that JP Morgan Chase issued false and misleading statements regarding its trading activity, which inflated the price of its stock. Then, trading losses incurred by JP Morgan Chase caused the bank’s stock value to plummet resulting in a billion dollars of investor losses. The Ohio Public Employees Retirement System (OPERS) lost approximately $2.5 million as a result of the alleged fraud.
According to the complaint filed in 2012, when announcing the trading losses, the bank said: “Regarding what happened, the synthetic credit portfolio was a strategy to hedge the firm’s overall credit exposure, which is our largest risk overall in a stressed credit environment. We are reducing that hedge, but in hindsight the new strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored. The portfolio has proven to be riskier, more volatile, and less effective as an economic hedge than we thought.”
The settlement class includes all persons who purchased JP Morgan common stock between April 13, 2012, and May 21, 2012. Joining the Ohio Public Employees Retirement System as lead plaintiffs are public pension funds in the states of Oregon and Arkansas, and Swedish pension fund AP7.