In a decision issued today, Judge Jones dismissed a proposed class action that challenged JP Morgan’s decision to hold onto certain notes from Lehman Brothers as the firm was collapsing:
Armed with merely conclusory allegations, Plaintiff asks the Court to speculate about how JPMC should have acted based on news articles selected after the fact and references to financial modeling reflected a supposed “market consensus” that Lehman was headed or default. However, the fiduciary duty to act prudently under the circumstances at time of decision precludes any judgment of a fiduciary’s actions “from the vantage point of hindsight.” Chao v. Merino, 452 F.3d 174,182 (2d Cir. 2006) (citation omitted). And, even if references to articles and basic financial modeling were sufficient to make it “theoretically conceivable” that JPMC should have known Lehman’s weakening financial condition, such speculation is not enough to defeat a motion to dismiss.
JP Morgan was represented by Paul Weiss.