J.P. Morgan has made an agreement in principle to settle its lawsuit with the pension fund of the American Federation of Television and Radio Artists (AFTRA) and two other funds, according to Bloomberg.
The lawsuit dates back to 2009. AFTRA claimed J.P. Morgan mishandled the reinvestment of its cash collateral in its securities lending program. The other funds that joined the class action suit are the Imperial County Employees Retirement System (California) and the Investment Committee of the Manhattan and Bronx Surface Transit Operating System (New York).
Specifically, the suit accused J.P. Morgan of earning fees and interest as well as hundreds of millions of dollars from collateral short-term loans totaling $1.9 billion, according to Global Custodian sister publication aiCIO. According to court documents, aiCIO reported, it is alleged the bank breached its fiduciary duty when it kept client assets in Sigma Finance Corp., a structured investment vehicle, even as it was collapsing.
The agreement in principle means the parties have agreed to a settlement but have not yet submitted it to the court. J.P. Morgan remains custodian for AFTRAs health and retirement funds, according to its Web site.
A spokesperson for AFTRA did not immediately respond to a request for comment. A J.P. Morgan spokesperson declined to comment.
(CG)