National investment loss lawyers KlaymanToskes is investigating JP Morgan Securities on behalf of investors whose cash positions were negligently placed into low-yield “sweep accounts,” despite the availability of significantly higher-yielding alternatives. JP Morgan Securities allegedly defaulted client cash into its Bank Deposit Sweep Program, which paid as little as 0.01%, instead of allocating funds to more suitable options.
JP Morgan Securities’ failure to act in the best interest of its clients allegedly resulted in millions of dollars in lost interest income for affected investors. KlaymanToskes is currently representing investors seeking to recover losses tied to low-interest-bearing accounts and negligent cash management by brokerage firms and their financial advisors.
If you had $1,000,000 or more placed into low-interest bearing sweep accounts, contact securities attorney Steven D. Toskes to discuss your potential recovery options at (888) 997-9956 or investigations@klaymantoskes.com for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
According to a federal class action lawsuit filed in the Southern District of New York (Case No. 1:24-cv-02847), JPMorgan Chase & Co. and its affiliated brokerage, JP Morgan Securities, are facing allegations of breaching their fiduciary duties by sweeping client cash into bank-affiliated deposit accounts that paid as little as 0.01% in interest, even as prevailing market rates soared above 4%.
The lawsuit alleges that, instead of selecting higher-yielding alternatives in the best interest of clients, JP Morgan Securities funneled client cash into its Bank Deposit Sweep Program, where the firm retained the profit spread between the ultra-low interest rates paid to clients and the higher rates the firm earned by reinvesting the same funds. The misconduct is said to have occurred across both brokerage and advisory accounts, affecting a broad range of investors during the rising rate environment of March 2022 through 2024.
Additionally, the lawsuit cites JP Morgan’s failure to consider reasonable alternatives in violation of its obligations under the SEC’s Regulation Best Interest (Reg BI). The complaint highlights that the firm used its client agreements and sweep disclosures to obtain technical consent, but failed to uphold its duty of care and loyalty by continuing the sweep practices even after interest rates materially increased.
Investors should know that class-actions may take many years to resolve, and that payouts are generally heavily undervalued. KlaymanToskes previously conducted a detailed study of securities arbitration versus class action and concluded that Financial Industry Regulatory Authority (FINRA) arbitration claims traditionally obtain an overall higher rate of recovery as opposed to participating and waiting for any recovery in a class action lawsuit.
KlaymanToskes is currently representing investors in claims related to negligent cash management practices and low-interest sweep accounts at major brokerage firms. Investors—especially retirees and high-net-worth individuals—may have suffered significant lost interest income as a result of being placed in low-yield programs like JP Morgan Securites’ Bank Deposit Sweep Program instead of higher-yielding options.
If you held in excess of $1,000,000 at JP Morgan Chase/JP Morgan Securities, and received below-market interest rates in sweep accounts, you are entitled to pursue a financial recovery through FINRA arbitration as opposed to participating and waiting for any recovery in a class action lawsuit. Contact securities attorney Steven D. Toskes at (888) 997-9956 or email investigations@klaymantoskes.com for a free and confidential consultation to discuss your recovery options.