Board of Trustees of the AFTRA Retirement Fund v. JPMorgan Chase Bank, N.A. United States District Court, S.D. New York
Economic Advice in Litigation
The Situation
Under JPMorgan Chase Bank, N.A.'s securities lending program, JPMorgan was engaged to lend clients' securities to third parties in return for posted collateral, typically cash. The collateral was then invested in securities on behalf of its "securities lending" clients.
The AFTRA Retirement Fund class action involves JPMorgan Chase Bank N.A.'s investment of "securities lending" clients' cash collateral in Sigma Finance, Inc.'s Medium-Term Notes. Sigma Finance, Inc., a structured investment vehicle, collapsed on September 30, 2008. The class action members claimed there was a breach of fiduciary duty of loyalty, duty to disclose, and duty to prudently manage the retirement fund's assets.
NERA's Role
NERA Vice President Christopher Laursen prepared an expert report, at the request of the defense, addressing conflicts of interest and fiduciary duties within financial organizations. The report opined on relevant laws, regulations, and supervisory guidance along with prevailing industry practice. Specifically, the report and deposition included a discussion of material non-public information, repurchase agreements, structured investment vehicles, information walls, and the state of various markets during 2007 and 2008.
The Result
Judge Shira A. Scheindlin granted a partial summary judgment in the case in favor of the defendant. The ruling and several references were consistent with the opinions detailed in Mr. Laursen's report. The remaining case issues were to be determined in trial during early 2012, but the parties reached a settlement.
Read Judge Scheindlin's Opinion.
Read case summary from Law360.
