JPMorgan Allows Disclosure of Contract Arbitration Award to ACI
The results of the contract arbitration case, American Century Investment Management Inc v. JPMorgan Invest Holdings LLC, Circuit Court of Jackson County, Missouri, No. 1116-CV21103, were recently released after JPMorgan Chase and Co. agreed to disclose them on March 21, 2012. This arbitration was decided on August 10, 2011, and the payment of the award was confirmed by a Missouri court on December 6.
The Financial Arbitration Panel's Judgement
The American Arbitration Association decided that JPMorgan had intentionally breached a contract agreement with American Century Investment Management, where JPMorgan had purchased funds from ACI, and promoted their own funds to the detriment of the ACI funds. The AAA panel awarded ACI $373.3 million dollars plus interest, which added up to $384 million.
Spokespeople for JPMorgan claimed that the panel's decision and award was biased to ACI, and that it ignored various alleged facts that would have been favorable to JPMorgan. ACI, on the other hand, believes that “Justice was served.” Prior to the arbitration, JPMorgan held a 41% stake in ACI, and sold those shares for $848 million to Canadian Imperial Bank of Commerce.
Evidence Leading to the Legal Arbitration Decision and Award
The story that the evidence told the contract arbitration panel was one where JPMorgan attempted to buy out ACI by unethical means. JPM had acquired a large minority stake in ACI and agreed to sell ACI's funds as well as their own. According to the panel, JPM had wanted to acquire the entire ACI company, and sought to drive down the value of the ACI stocks by pushing the JPMAM funds, downplaying the ACI funds—even encouraging investors to drop the ACI funds in favor of JPMAM, and providing incentives to employees to sell JPM products. Added to this, Jes Staley was criticized for corporate espionage, as he sat on the board for ACIs parent company while working for JPMorgan.