Shareholders sue JPMorgan over $2B trading loss
JPMorgan Chase & Co. chairman and CEO Jamie Dimon in New York City on May 3, 2012. / Mario Tama/Getty Images
(AP) NEW YORK — Shareholders of JPMorgan Chase & Co. (JPM) have filed two lawsuits against the biggest U.S. bank, accusing it and its leaders of taking excessive risk and causing a monumental $2 billion trading loss.
The company disclosed the loss last week, saying it resulted from a failed hedging strategy.
The lawsuits filed on Wednesday in New York claim JPMorgan changed its risk model without telling investors. They say the shift led to the losses and claim company leaders misled investors.
One suit was filed by California shareholder James Baker. A second was filed by shareholder Arizona-based Saratoga Advantage Trust's financial services portfolio.
JPMorgan declined to comment.
Meanwhile, FBI Director Robert Mueller said Wednesday the bureau has launched a preliminary investigation of JPMorgan following the $2 billion trading loss at the bank.
Mueller's comment at a Senate Judiciary Committee hearing was the first on-the-record confirmation of the probe.
On Tuesday, a law enforcement official said that the FBI's New York office is heading an inquiry into the JPMorgan loss.
Under attorney general guidelines for FBI operations, a preliminary investigation may be initiated on the basis of any allegation or information indicative of possible criminal activity. Time limits are set for completion of preliminary investigations - usually six months, although six-month extensions can be granted. Extensions of preliminary investigations beyond a year must be approved by FBI headquarters.
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