A U.S. District Court dismissed a lawsuit of former employees of Washington Mutual
The plaintiffs filed a case in November 2007 against Washington Mutual asserting the financial company breached duties it owed under the Employee Retirement Income Security Act by allowing them to invest their 401(k) funds in Washington Mutual stock.
The funds declined as the stock of Washington Mutual, one of the largest U.S. financial institutions, plunged -- hurt by mounting losses.
After Washington Mutual filed for bankruptcy in September 2009, the employees of the company added JPMorgan Chase as a defendant, after the second largest U.S. bank acquired some banking assets of the failed company.
But earlier this year, JPMorgan asked the court to dismiss the action saying it had bought only assets of Washington Mutual and not the entire holding company, alleging it was not responsible for the collapse of the financial institution.
On Monday, U.S. District Judge Marsha Pechman dictated JPMorgan could not be liable for the mismanagement of the retirement funds.
JPMorgan spokesman Tom Kelly declined comment.
The case is In Re, Washington Mutual Inc Securities, Derivative & ERISA litigation, U.S. District Court, Western District of Washington, No. 08-1919
(Reporting by Juan Lagorio; Additional reporting Emily Chasan and Elinor Comlay; Editing Bernard Orr)