FX Currency Manipulation Impact on ERISA Plans
Farrell v. JPMorgan Chase & Co., et al.
United States District Court, Southern District of New York
Case No.: 2016-cv-02627
On April 7, 2016, Keller Rohrback L.L.P filed a proposed Class Action Complaint against JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. (together “JPMorgan Chase”) on behalf of all participants and beneficiaries of employee benefit plans for whom JPMorgan Chase provided asset management in connection with foreign securities. The claims arise under the Employee Retirement Income Security Act of 1974 (ERISA).
The Plaintiff alleges that Defendant JPMorgan Chase Bank, N.A.—as the sponsor of collective trusts that hold ERISA plan assets and in connection with its other fiduciary roles—breached its statutory duties of prudence and loyalty and engaged in prohibited transactions. These violations are a result of the Defendants participating in and profiting from a currency price-fixing scheme that has roiled the $5.3 trillion per day Foreign Exchange (“FX”) market. While JPMorgan Chase Bank, N.A. colluded in this scheme, it also served as a fiduciary with respect to investments that Plaintiff alleges were negatively impacted by the scheme.
The banks involved in currency manipulation, including JPMorgan Chase, worked together in electronic chat rooms to rig foreign currency rates to benefit themselves and each other, at the expense of investors. These practices also affected retirement plans governed by ERISA that invest in foreign securities or foreign currencies and receive principal, dividends, and interest that are paid in foreign currencies or require the exchange of foreign currency into and from U.S. Dollars.
Complaint — 04/07/2016