Alert October 04, 2011

Derivative Suit Filed Against JPMorgan Directors Claiming Breach of Fiduciary Duty and Unjust Enrichment in Connection with JPMorgan’s $88.3 Million Settlement with OFAC

In a recent shareholder derivative complaint filed in the U.S. District Court for the Southern District of New York, shareholders of JPMorgan Chase & Co. (“JPMorgan”) brought a derivative action claiming breach of fiduciary duty and unjust enrichment by the directors of JPMorgan in connection with JPMorgan’s $88.3 million settlement with OFAC to resolve “potential civil liability for apparent violations” of regulations and executive orders administered and enforced by OFAC. 

The plaintiffs allege, among other things, that the JPMorgan directors failed to properly supervise and monitor the adequacy of JPMorgan’s internal controls and allowed misleading statements and filings to be issued.  The plaintiffs also claim that the JPMorgan directors were unjustly enriched when they accepted compensation and director remuneration while allegedly breaching their fiduciary duties to JPMorgan.  (Louisiana Municipal Police Employees Retirement System v. Dimon, et al, USDC SDNY, 11 CIV 6231 (Sept. 8, 2011)).