JPMorgan Chase Bank settled a claim by several retirement funds that it breached its fiduciary duty under the Employee Retirement Income Security Act of 1974 for $150 million, according to the Practical Law Company.

Seven months after the U.S. District Court for the Southern District of New York held that JPMorgan did not breach a fiduciary duty of loyalty to the plaintiffs under ERISA, the parties in Board of Trustees of the AFTRA Retirement Fund v. JPMorgan Chase Bank, N.A. filed a motion for preliminary approval of a settlement of the ERISA class action.

The Board of Trustees of the AFTRA retirement funds, on behalf of the class of ERISA plan clients, argued that JPMC breached its fiduciary duty of loyalty when its securities lending service invested the assets of the ERISA plans in Sigma Finance, Inc. (SFI) while JPMC's investment banking division simultaneously extended billions of dollars of repurchase agreement financing to SFI and retained a high priority for claims in the event SFI was unwound. The threshold issue in the case was whether JPMC was performing a fiduciary function for its ERISA plan clients when it extended repurchasing financing to SFI.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.