A US District Judge ruled Monday that JPMorgan (JPM) must face a lawsuit filed by shareholders against the banking giant for misleading them when it knowingly hid risks related to at least $6.2 billion losses in 2012 over trades made by the head of its London trading desk, Bruno Iksil, a French national who came to be known as the ‘London Whale’.
Reuters reported that Judge Daniels in Manhattan said shareholders could pursue claims that JPMorgan, Chief Executive Jamie Dimon and former Chief Financial Officer Douglas Braunstein misled them about the bank’s ability to manage risk before the losses in “London Whale” scandal surfaced.
Daniels also said that the bank, Dimon and Braunstein committed fraud by knowingly concealing to investors the increased risks to Iksil’s huge position in exotic derivative instruments on an April 13, 2012 earnings call when Dimon labeled as a “tempest in a teapot” reports about the credit portfolio that Iksil managed.
Wallstreetpit has reached out to JPMorgan for comment on the report and will update this post with any additional information we learn.
JPM shares are up 18 cents, or 0.304%, at $60.89 in pre-market trading Tuesday.