JPMorgan class action alleges cash sweep program shortchanges customers

JPMorgan cash sweep class action lawsuit overview:

• Who: Plaintiff Dan Bodea filed a class action lawsuit against JPMorgan Chase & Co. and J.P. Morgan Securities LLC.
• Why: The JPMorgan cash sweep program allegedly shortchanges customers and confers “outsize benefits” to the defendants.
• Where: The JPMorgan class action lawsuit was filed in New York federal court.

A new JPMorgan class action lawsuit alleges the bank’s cash sweep program confers “outsized benefits” to itself and affiliates at the expense of its customers.

Plaintiff Dan Bodea says he had a JPMorgan Chase bank account in which cash was automatically “swept” into a low-interest-bearing account.

The JPMorgan cash sweep program purportedly offered customers an interest-paying vehicle by automatically sweeping uninvested cash balances into a deposit account at its affiliated bank.

Bodea says JPMorgan’s customer agreement acknowledges its role as a customer agent. Therefore, he says the bank serves as a fiduciary for its customers and has a duty to serve the customers’ interests instead of its own.

However, the JPMorgan class action lawsuit alleges the bank uses the sweep program to “confer outsized benefits” to itself and its affiliates by keeping the majority of customers’ cash and concealing the benefits it receives.

Plaintiff says JPMorgan cash sweep program benefits bank at customers’ expense

The JPMorgan class action lawsuit claims the bank “failed to adequately, if at all, disclose to its customers that, as to the bank deposit sweep program it was an agent serving two masters.  Those masters are its customers and affiliated companies,” including JPMorgan Chase and JPMorgan Securities LLC.

Bodea alleges JPMorgan negotiated one-sided transactions designed to divert returns on customers’ swept cash to the bank. He says customers are not informed about the interest rate and other income JPMorgan earns at their expense.

He also claims JPMorgan often concealed fees from customers by claiming they did not charge any fees under the JPMorgan cash sweep program.

The JPMorgan cash sweep class action asserts claims for breach of fiduciary duty, gross negligence, unjust enrichment, breach of contract and violations of New York business law.

Another recent JPMorgan class action lawsuit alleges the bank forced employees to skip lunch and work off the clock.

What do you think about the allegations in the JPMorgan class action lawsuit? Join the discussion in the comments.

Bodea is represented by Radha Nagamani Raghavan, Michael Dell’Angelo, Andrew D. Abramowitz and Alex B. Heller of Berger Montague PC and Alan L. Rosca, Jonathan A. Korte and Paul J. Scarlato of Rosca Scarlato LLC.

The JPMorgan cash sweep class action lawsuit is Dan Bodea v. JPMorgan Chase & Co., et al., Case No. 1:24-cv-06404, in the U.S. District Court for the Southern District of New York.

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