Zamansky & Associates LLC is investigating JP Morgan Chase & Co. ("JP
Morgan")(NYSE: JPM) over sales of proprietary mutual funds and Chase
Strategic Portfolios for possible securities fraud and/or breaches of
duties owed to bank and brokerage firm customers.
On July 3, 2012, The New York Times published an article entitled
"Former Brokers Say JP Morgan Favored Selling Bank's Own Fund Over
Others". This article reported that JP Morgan encouraged its financial
advisers to favor JP Morgan's own products even when competitors had
better-performing or cheaper options. With one crucial offering, JP
Morgan exaggerated the returns of what it was selling in marketing
materials, according to documents reviewed by The Times.
Additionally, JP Morgan was ordered by arbitrators to pay $373 million
to a competitor for favoring its products, despite an agreement it had
to sell alternatives.
While investors have pulled money from stock funds, JP Morgan has
gathered assets in its stock funds at a rapid rate, despite having only
a small group of top-performing mutual funds. Over the last three years,
roughly 42 percent of its funds failed to beat the average performance
of funds that make similar investments, according to Morningstar, a fund
researcher. "I was selling JP Morgan funds that often had weak
performance records, and I was doing it for no other reason than to
enrich the firm," said Geoffrey Tomes, who left JP Morgan last year. "I
couldn't call myself objective."
The investigation also concerns sales of Chase Strategic Portfolios, an
investment program offering managed portfolios that has grown to $20
billion in assets. JP Morgan charges investors management fees of 1.6%,
in addition to the fees charged by mutual funds in the portfolios--other
firms waive the duplicative fees. According to The New York Times, JP
Morgan also provided investors with marketing materials containing
misleading "theoretical" returns, which mask the true weaker performance
of the Chase Strategic Portfolios.
If you JP Morgan bank or brokerage customer who invested in its mutual
funds or the Chase Strategic Portfolios, please contact Jake Zamansky at
(212) 742-1414 or [email protected].
Zamansky & Associates is one of the leading law firms specializing in
securities fraud and financial services class action litigation and
Zamansky & Associates LLC
Jake Zamansky, 212-742-1414