A New York state judge left intact most of a lawsuit brought by US billionaire Len Blavatnik accusing J.P. Morgan Chase of mismanaging an investment account. The lawsuit blamed J.P. Morgan banker Ted Ufferfilge for losing $98 million in an account owned by Blavatnik's industrial holding company, Access Industries, by betting on risky mortgage securities.
Claims for negligence, breach of fiduciary duty and negligent misrepresentation could go forward, New York State Supreme Court Judge Melvin Schweitzer ruled on Friday. Claims for breach of contract were dismissed in part. The ruling applies to an amended complaint filed in December 2010 after parts of the original complaint were dismissed.
According to the lawsuit, Access had hired J.P. Morgan's investment management unit to manage the investment account, called CMMF, with conservative objectives. Instead, the bank and Ufferfilge invested in risky and illiquid mortgage-related securities, at the same time that J.P. Morgan was shedding the same kind of assets in its own portfolios, according to court filings.
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