The U.S. Commodity Futures Trading Commission (CFTC) is looking into whether JPMorgan Chase & Co. made proper disclosures about JP Morgan proprietary investment products that were sold to wealthy clientele.
At the heart of the issue is whether JPM made proper disclosures before putting client money into funds owned by JPM. Because of potential conflicts of interest, there are specific disclosures that must be made when recommending and selling proprietary products to investors.
The Volcker Rule, which is part of the Dodd-Frank Act, bans proprietary trading, but there are a number of exemptions from the rule. The CFTC is reviewing whether JPM kept its subsidiary, Highbridge Capital Management (HCM), inappropriately solvent during the recent financial crisis.
Highbridge’s assets went from a 21 percent portion of private banking money up to 71 percent by 2012, and recently they closed on a specialty fund with more than $3 billion in committed capital to invest in secured debt. HCM has plans to launch a $250 million Asia-focused hedge fund.
Call a Los Angeles Stockbroker Lawyer Today
If you invested in and lost money in a JPMorgan proprietary fund, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker lawyer today for a consultation regarding your rights.