JPMorgan and Morgan Stanley Face Lawsuits Over Buyout Deal Roles
Shareholders are suing JPMorgan Chase & Co. (JPM) and Morgan Stanley for their roles in multibillion-dollar buyout deals, alleging the banks helped undervalue public companies during sales to private equity firms with which they have business ties. A recent corporate-law overhaul in Delaware has made it harder to sue executives but not financial advisers like JPMorgan or Morgan Stanley. This shift has led plaintiffs to target banks instead of directors for potential liability, especially after a court setback earlier this year involving Goldman Sachs Group Inc. (GS). Legal experts suggest the threat of litigation is pushing banks toward greater transparency and carefulness in their advisory roles. JPMorgan and Morgan Stanley have each faced two lawsuits but managed to get one dropped so far. Both deny wrongdoing, claiming they facilitated fair processes with proper disclosures.
Topics: buyout deals corporate law financial advisors shareholder lawsuits