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Compliance November 8, 2011
Louisiana Pension Fund Sues JPMorgan for Breach of Fiduciary Duty
November 8, 2011 (PLANSPONSOR.com) – JPMorgan Chase & Co
was sued by Louisiana’s police pension fund, which claims the bank’s $88.3
million settlement with the U.S. Treasury Department stemmed from a breach of
fiduciary duty by its directors, reports Bloomberg.
Reported by Tara Cantore
The complaint, filed in New York State Supreme Court in Manhattan on Monday, follows an August 25 announcement that the company agreed to resolve alleged violations of international sanctions programs, including Cuban assets control and anti-terrorism regulations.
According to Bloomberg, the Louisiana Municipal Police Employees Retirement System, an investor in JPMorgan that provides retirement benefits for full-time municipal police officers in Louisiana, accused the current directors of the New York-based bank, including Chairman Jamie Dimon, of “knowingly” allowing and rewarding violations of Treasury Department programs.
The Treasury said that JPMorgan, through its correspondent banks, maintained prohibited financial transactions with sanctioned entities in countries including Cuba and Iran. The JPMorgan payment agreed upon by the Office of Foreign Assets Control (OFAC involves “egregious” violations for five years, according to a Treasury Department statement.
The OFAC enforcement action covers actions from December 2005 to March 2011 involving multiple violations of sanctions programs, the Treasury Department said. The violations include processing 1,711 wire transfers totaling $178.5 million from December 2005 to March 2006 involving Cuban people and a trade loan of $2.9 million with a blocked affiliate to the Islamic Republic of Iran Shipping Lines, reports Bloomberg.OFAC said the $88.3 million payment from JPMorgan is based on the bank’s cooperation, transaction review, and the absence of an OFAC notice or finding of violation during the five years of the transactions.
The lawsuit seeks unspecified damages “caused by the individual defendants’ unlawful course of conduct and breaches of fiduciary duty,” which includes costs to the company associated with the settlement, remedial measures, damage to goodwill, and “increased regulatory scrutiny.”
The case is Louisiana Municipal Police Employees Retirement System v. Dimon.