JPMorgan Chase is reportedly facing a lawsuit that alleges that the bank paid “unreasonably” low interest rates on accounts used in its cash sweep program.
Illinois resident Dan Bodea alleges in the suit that the bank used the program to shortchange customers while pretending to act as their fiduciary, Reuters reported Monday (Aug. 26).
Reached by PYMNTS, JPMorgan Chase declined to comment on the report.
The lawsuit was filed Friday (Aug. 23) in Manhattan federal court, according to the report.
It alleges breaches of fiduciary duty, gross negligence and unjust enrichment, and seeks unspecified damages, per the report.
Ameriprise, LPL Financial, Morgan Stanley, UBS and Wells Fargo are facing similar lawsuits, the report said.
In another, separate recent development on the legal front, JPMorgan Chase said in its “Consolidated Financial Statements” for the six months ended June 30 that the Consumer Financial Protection Bureau (CFPB) has inquired about transactions through the Zelle network and that it is currently evaluating the next steps, which could include litigation against the CFPB.
“JPMorgan Chase is responding to inquiries from the Consumer Financial Protection Bureau (CFPB) regarding the transfers of funds through the Zelle Network,” the statement read. “In connection with this, the CFPB Staff has informed JPMorgan Chase that it is authorized to pursue a resolution of the inquiries or file an enforcement action. JPMorgan Chase is evaluating next steps, including litigation.”
In another legal issue, in June, a London High Court judge’s ruling resolved a legal dispute between JPMorgan Chase and Haris Karonis, the founder and CEO of Greek FinTech company Viva Wallet.
JPMorgan invested more than $800 million in Viva Wallet two years earlier, acquiring a 48.5% stake in the company.
Disagreements between JPMorgan and Karonis led to legal claims filed against each other in February. Karonis alleged that the banking giant tried to push down Viva Wallet’s valuation, while JPMorgan alleged that Karonis had taken steps to limit or circumvent its rights as an investor.
The court’s verdict accepted elements of both parties’ arguments, providing clarity on the valuation of Viva Wallet and its potential for expansion into new markets.
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