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By Chris Bruce
Feb. 25 — The Delaware Supreme Court Feb. 25 dismissed a lawsuit by Providence, R.I., that alleged faulty oversight by top JPMorgan Chase & Co. executives, upholding a lower court that said allegations in the suit had already been addressed by a federal court in New York.
The brief order by Chief Justice Leo E. Strine, Jr. — which came one day after the case was argued — upheld a July 29, 2015, decision by the Delaware Chancery Court, which said Providence cannot relitigate claims that JPMorgan Chief Executive Jamie Dimon and others breached their fiduciary duties.
Providence, which brought the suit as a derivative action on behalf of JPMorgan, alleged failures of oversight and compliance from Jan. 1, 2005, through Jan. 7, 2014, in connection with a string of settlements and consent orders, saying stockholders bore the brunt of more than $2 billion in fines and penalties.
A JPMorgan spokesman did not immediately respond to a request for comment on the ruling Feb. 25.
In its 2015 decision, the Chancery Court said the U.S. District Court for the Southern District of New York considered and dismissed two suits involving the same parties as this case, and, in at least one instance, the same subject matter.
One suit, brought by Chaile Steinberg, a JPMorgan shareholder, was dismissed by the Southern District of New York July 16, 2014. The other suit, brought by two pension funds, was dismissed by the same court July 23, 2014.
Among other points, according to the Chancery Court, in each case, the Southern District held that the plaintiffs failed to show that a demand for action by the board would have been futile.
Such demands are required for derivative suits unless plaintiffs can show the demand would have been pointless.
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The ruling is at http://www.bloomberglaw.com/public/document/CITY_OF_PROVIDENCE_RHODE_ISLAND_derivatively_on_behalf_of_JPMORGA/1. The New York decisions are at http://www.bloomberglaw.com/public/document/Steinberg_v_Dimon_No_14_Civ_688_PAC_2014_BL_196933_SDNY_July_16_2 and http://www.bloomberglaw.com/public/document/CENTRAL_LABORERSTM_PENSION_FUND_and_STEAMFITTERS_LOCAL_449_PENSIO.
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