Tuesday, November 27, 2012

Investors: JPMorgan A 'Secret Hedge Fund,'




From finalternatives: JPMorgan Chase shareholders have trotted out the dreaded epithet—"hedge fund"—in a revised class-action lawsuit against the bank.

The shareholders, led by several large public pension funds, accuse the bank of turning its chief investment office into a "secret hedge fund." The move blew up in the bank's face when a trader known as the "London whale" cost it some $6 billion on bad credit-default swap index trades.
JPMorgan CEO Jamie Dimon "secretly transformed the CIO from a risk management unit into a proprietary trading desk whose principal purpose was to engage in speculative, high-risk bets designed to generate profits," the revised class-action complaint, filed last week in New York federal court, alleges….


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