JP Morgan, CEO Jamie Dimon Prevail in Shareholder Lawsuit Centered Around Alleged Ties to Disgraced Former Hedge Fund Manager Jeffrey Epstein
According to a report from Reuters, JP Morgan, its Chief Executive Officer (CEO) Jamie Dimon, and the company’s board of directors have prevailed in a shareholder derivative lawsuit centered around its alleged connections with former distracted hedge fund manager Jeffrey Epstein. A federal court dismissed the shareholder lawsuit on the grounds that shareholders failed to follow the proper procedures to bring a derivative action. Here, our West Palm Beach shareholder rights attorney highlights key issues raised in this case, including the key lesson for plaintiffs in shareholder derivative claims.
Shareholder Lawsuit Against JP Morgan and CEO Jamie Dimon Dismissed
A United States federal judge dismissed a shareholder lawsuit against JPMorgan Chase CEO Jamie Dimon, and the bank’s board of directors. The lawsuit accused them of, among other things, breach of fiduciary duty for allegedly overlooking warning signs related to their former client, the discharged hedge fund manager Jeffrey Epstein. The shareholder derivative lawsuit was filed by two pension funds—one based in Pittsburgh, Pennsylvania and one based in Miami, Florida.
Notably, the shareholder lawsuit in question was a derivative claim. A shareholder derivative lawsuit is a type of legal action brought by a shareholder or shareholders of a corporation on behalf of that corporation against a third party—most often an insider of the company. The federal judge dismissed the lawsuit on the grounds that the plaintiffs (shareholders) bank’s board about their concerns before initiating the lawsuit.
Understanding the Procedural Requirements of a Shareholder Derivative Claim
As stated previously, shareholder derivative claims allow individual shareholders or groups of shareholders to initiate legal action on behalf of a corporation. However, shareholders generally cannot immediately file a derivative lawsuit. Instead, shareholders usually need to make a “demand” of the board of directors to address the issue at hand. That being said, there are some exceptions. A plaintiff in a shareholder derivative lawsuit in Florida may be able to bring a derivative action even if no demand was ever made if they can prove that a demand would be “futile.”
Demand futility requires proving that there is a good reason why the plaintiffs should not be required to make such a demand. Notably, in the shareholder derivative lawsuit filed against JP Morgan, CEO Jamie Dimon, and the Board of Directors, the federal judge ruled that the demand futility requirement was not satisfied. As a consequence, the derivative lawsuit was dismissed.
Consult With Our West Palm Beach, FL Shareholder Litigation Attorneys Today
At Pike & Lustig, LLP, our West Palm Beach shareholder litigation lawyers go above and beyond to protect the rights and interests of our clients. Have specific questions or concerns about a shareholder dispute? We are here to protect your rights and interests. Call us now or contact us online for your confidential case review. Our firm handles shareholder cases throughout Florida, including in Palm Beach County, Martin County, Broward County, and Miami-Dade County.