Lawsuit Represents Latest in Series of Suits Accusing Banks of Improperly Sweeping Customers’ Cash Into Accounts With Low Interest Rates
NEW YORK, December 12, 2024 – DiCello Levitt LLP has filed a class action complaint in the United States District Court for the Southern District of New York on behalf of Plaintiff Nancy McNamara and other similarly situated individuals against JPMorgan Chase & Co., J.P. Morgan Securities LLC, and JPMorgan Chase Bank, N.A. (collectively, “Defendants” or “J.P. Morgan”). The complaint alleges that Defendants have breached their fiduciary duties and contractual obligations by profiting from their cash sweep program at the expense of their customers.
According to the complaint, J.P. Morgan’s cash sweep program by default transfers uninvested cash balances from customers into accounts at J.P. Morgan’s affiliate bank, which provide lower interest rates, allowing the bank to invest the cash for its own benefit and keep the “spread” as net interest income, while providing unreasonably low returns to customers.
“Ms. McNamara trusted J.P. Morgan to act in her best interests, but instead, the bank has exploited this trust to maximize its own profits,” said DiCello Levitt Partner Brian O’Mara. “We seek to hold J.P. Morgan accountable for its actions by recovering the losses suffered by customers and disgorge the ill-gotten gains of J.P. Morgan, and we encourage others who have been negatively affected by the company’s cash sweep program to come forward.”
Between February 2022 and March 2024, McNamara maintained an account with J.P. Morgan Securities in which cash was held over the course of the life of the account. During this period, McNamara and other customers’ cash balances were “swept” into bank deposit accounts at JPMorgan Chase Bank bearing lower rates of interest than J.P. Morgan was able to secure for themselves, thereby reducing the amount customers earned while benefiting J.P. Morgan.
“J.P. Morgan’s actions represent a clear conflict of interest,” said DiCello Levitt Partner Steve Jodlowski. “By prioritizing its own financial gain over the interests of its customers, the bank has violated its fiduciary duties and contractual obligations. J.P. Morgan took its customers’ cash and used it for its own investment and lending activities, and then kept the spread between what it earned and what it paid out as income. We are seeking justice for those who have been negatively impacted by a cash sweep program, whether by J.P. Morgan or other financial institutions who took advantage of their customers.”
The complaint alleges breach of fiduciary duty, gross negligence, unjust enrichment, breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the New York General Business Law.
Those affected by a cash sweep program by J.P. Morgan or any other financial institution, should contact DiCello Levitt’s Jarett Sena at [email protected] or (332) 322-2392. DiCello Levitt is actively fighting for those wronged by financial institutions.
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