JP Morgan told to pay Blavatnik $50m in damages
- 27 August 2013
- From the section Business
JP Morgan has been ordered to pay Russian billionaire Leonard Blavatnik $50m after losing a claim for damages.
Mr Blavatnik brought the claim against the investment bank after suffering losses following the collapse of the US subprime mortgage market.
New York judge Melvin Schweitzer ruled that JP Morgan breached its contract with Mr Blavatnik's investment fund.
But he rejected a claim for negligence because at the time the investments were considered "reasonable".
Mr Blavatnik, one of the world's richest men, sued the largest US bank in 2009 to recover more than $100m.
According to Mr Blavatnik, JP Morgan Investment Management promised that it would invest his money conservatively after opening the account in 2006.
Instead, the bank allegedly breached a 20% limit set for mortgage-backed securities by misclassifying securities backed by a pool of subprime loans.
The judge's ruling, released late on Monday, said JP Morgan should pay $42.5m damages, plus interest at 5% a year from 2008.
Mr Blavatnik welcomed the ruling, saying in a statement: "There are a lot of people out there who, I understand, feel they have been wronged by JP Morgan but cannot afford to take on a huge bank. They shouldn't have to."
JP Morgan spokesman Doug Morris said: "We are pleased that the court rejected CMMF's negligence claims, and found that our investment professionals lived up to their responsibilities.
"We respectfully disagree with the court's interpretation of our agreement with CMMF, and we are considering our options regarding that finding."
The ruling follows lawsuits and investigations that have dogged JP Morgan, including the huge "London whale" trading losses and manipulation of commodities markets.