J.P. Morgan Chase is the third largest financial institution in the United States and one of the oldest in the world. Formed in 2000 when JP Morgan & Co. merged with Chase Manhattan Corporation, JP Morgan Chase serves corporations, hedge funds, governments, high-net-worth individuals and institutional investors in 100 countries. In 2008, the company purchased struggling Bear Sterns and integrated the previous financial giant into the new J.P. Morgan Securities firm.
A securities brokerage firm licensed by FINRA, J.P. Morgan Chase has a legal duty to supervise its brokers and its brokers' recommendations to clients to ensure compliance with and prevent violations of the rules of the security industry. When an individual broker is negligent or acts in an unlawful manner against the interests of the client and that client suffers damages as a result of such wrongdoing, the firm may be held liable for the investor's losses.
Bear, Sterns & Co., Inc.
Up until the recent financial crisis, Bear, Sterns & Co., Inc. was one of the world's largest financial firms providing investment banking, securities trading, and brokerage services. The firm was headquartered in New York City with offices throughout the United States as well as in Europe, Asia, and South America. Founded in 1923, Bear Stearns was integrated with J.P. Morgan Chase in 2008. In January 2010, Bear Stearns' name was officially changed to J.P. Morgan Securities.
JP Morgan Chase Fraud and Broker Misconduct
JP Morgan Chase and its registered brokers are required to abide by securities industry regulations. When they do not, they face fines and potential investor claims and consumer class actions. JP Morgan and Chase have been fined in the past for violating certain SEC and FINRA regulations.
In 2003, JP Morgan was fined for sharing in profits from Hot IPOs. The illegal profit sharing was conducted at Hambrecht & Quist LLC, later acquired by JP Morgan. JP Morgan was required to pay $6 million for their unlawful conduct. In 2006, Chase Investment Services was fined $500,000 for failure to supervise violations. Specifically, the failed supervision was in regard to certain 529 college savings plans.
In 2011, Meyer Wilson reported that JP Morgan was required to pay $153.6 million on a securities fraud charge. The SEC investigated and accused JP Morgan Chase's Wall Street division for selling mortgage-backed securities that had little chance of succeeding. These securities were sold just prior to the U.S. housing market crash of '07/'08.
Common Investment Abuses
If you invested your money with JP Morgan Chase or one of its registered brokers and you lost a substantial amount of money, about $75,000 or more, this could have been caused by one of these common types of investment abuses:
- Breach of Fiduciary Duty – When you invest your money with a firm or a broker, that party has a fiduciary duty to uphold. Essentially, this means that your broker and brokerage firm agree to act in your best interests and not their own.
- Failure to Supervise – This type of negligence is a relatively common type of investment misconduct. Brokers and firms must adequately manage their investors' accounts to ensure that best practices are being followed.
- Misrepresentation – Brokerage firms must disclose all information that is necessary to their investors making informed decisions about their investments. This includes being truthful about investment risks.
- Ponzi Schemes – These usually make headlines, such as Bernie Madoff's Ponzi scheme. Essentially, fraudsters who run Ponzi schemes pay investors "returns" with money from investors, rather than actual earned revenue.
- Unsuitability – Brokers must manage their investors' portfolios and only recommend investments that are suitable for their financial situation. Brokers can be penalized when they recommend unsuitable investments that cause their investors to lose money.
Recover Your Losses Caused by JP Morgan / Chase
Meyer Wilson can conduct aggressive, effective claims against brokerage firms like JP Morgan/Chase because we have considerable resources and skills that come from exclusively focusing on securities fraud and arbitration. Our attorneys have over five decades of collective experience with developing precise, strategic cases on behalf of our clients.
Our firm has reclaimed hundreds of millions of dollars in state and federal courts and in arbitration through FINRA, AAA, and privately. Our investment loss lawyers also represent international clients in claims against U.S. investment firms. No matter how established or heavily-resourced a brokerage firm is, Meyer Wilson is prepared to pursue the interests of our clients with excellence, precision, and effective strategies.
Contact an investment fraud attorney at our firm today for a free case evaluation to learn if you might have an investor claim against JP Morgan Chase or one of its registered brokers.