Fiduciary and Unjust Enrichment Claims Dismissed
The judge dismissed claims for breach of fiduciary duty, rejecting the argument that the brokerage owed broad fiduciary obligations as an agent handling swept cash.
To the extent a broker acts as an agent, she wrote, any fiduciary duty is limited to the specific transactions at issue. The court found that J.P. Morgan Securities fulfilled that limited obligation by transferring uninvested cash into a JPMorgan Chase Bank account and withdrawing funds at customers’ direction.
The unjust enrichment claim was also dismissed. Because an express contract governs the relationship and subject matter at issue, the court ruled, an equitable claim for unjust enrichment cannot stand.
Representation and Next Steps
The consumers are represented by attorneys from Berger Montague and Bernstein Litowitz Berger & Grossmann LLP.
JPMorgan is represented by counsel from Jones Day.
Representatives for the parties did not immediately respond to requests for comment late Thursday.
For now, the JPMorgan Cash Sweep Claims remain partially intact — narrowed but alive — as the litigation moves forward, spotlighting how brokerage firms handle the quiet pools of customer cash that sit between trades, earning interest in the background while investors wait.
