JPMorgan Chase do not have to face a shareholder lawsuit claiming they failed to properly investigate the "London Whale" trading scandal that caused USD6.2 billion in losses, a federal appeals court ruled today.
This derivative action is one of many to arise out of the “London Whale” trading debacle, which cost JPMorgan Chase billions. Plaintiffâappellant Ernesto Espinoza, a JPMorgan shareholder, believes that JPMorgan has not done enough to go after those whom he deems responsible. Through this lawsuit, he seeks to compel JPMorgan to take action, up to and including suing the alleged wrongdoers. The district court (Daniels, J.) dismissed Espinoza’s complaint, finding that he had not pleaded facts showing that the JPMorgan Board of Directors had wrongfully refused the demand for action.
The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge did not abuse his discretion by dismissing the lawsuit by shareholder Ernesto Espinoza.
