Louisiana Municipal Police pension fund sues J.P. Morgan Chase over FX trading
By Bloomberg | August 31, 2012 2:36 pm
The $1.4 billion Louisiana Municipal Police Employees Retirement System, Baton Rouge, filed a lawsuit in federal court against J.P. Morgan Chase, accusing the bank of manipulating clients' foreign-exchange transactions for its own benefit.
The suit, filed Thursday in U.S. District Court in New York, claims J.P. Morgan Chase took advantage of investors by causing them to pay what were often the worst currency rates available on a given trading day.
“J.P. Morgan's scheme allowed it, in violation of its contractual and fiduciary obligations, to extract hundreds of millions of dollars in illicit risk free profits from its clients under the guise of FX trading,” according to the complaint.
J.P. Morgan recorded more than $4 billion in foreign-exchange revenue between 2005 and 2011, according to the complaint.
The pension fund, which is suing on behalf of other institutional investors for which the bank executed currency trades since 2005, is seeking damages, punitive damages and disgorgement of profits.
J.P. Morgan spokeswoman Jennifer Zuccarelli didn't immediately return a call seeking comment on the lawsuit.