A New York appellate court reversed the dismissal of contract and breach of fiduciary duty claims asserted against J.P. Morgan, which managed investments on behalf of a foreign reinsurer. The plaintiff – a beneficiary of the investment management agreement between the reinsurer and J.P. Morgan – sued J.P. Morgan as a result of its investment in, and alleged failure to heed plaintiff’s warnings about, certain mortgage-backed securities. The trial court dismissed the claims, but the appellate court reversed, finding that the claims were not pre-empted by New York’s Martin Act, which empowers the Attorney General to bring criminal actions against violators. The Attorney General submitted an amicus brief arguing against pre-emption, pointing to the benefit of parallel civil proceedings by so-called ‘private attorneys general’ such as the plaintiff. Assured Guaranty (UK) Ltd. v. J. P. Morgan Investment Management, Inc., No. 603755/08 (N.Y. App. Div. Nov. 23, 2010).
This post written by John Pitblado.