A judge in Oklahoma has levied a massive judgment against JPMorgan Chase for the bank’s failure to follow trust administration protocols for the estate of a 1900s oil baron. The granddaughter of the man had been benefitting from the trust, which was reportedly mismanaged by the financial behemoth. JPMorgan has been ordered to pay $18 million.
A Tulsa County judge reportedly found that the organization had been blatantly negligent in the oversight of the accounts. The oil baron’s granddaughter died in 1996, and the offenses allegedly occurred throughout the duration of the trust. Court documents show that JPMorgan had intentionally sold unsuitable financial products to the trust, violating fiduciary duty associated with the account.
The trust was established by the late William Skelly, the man who founded the well-known Skelly Oil Company. Skelly died in 1957, according to information from his family. Not only did the man found an influential oil company, but his wife also had connections to Mobil Oil, which made the family one of the most highly regarded groups in Tulsa.
Experts say that the implications of the ruling are likely to extend to future trust administration cases. For example, stockbrokers are permitted to make financial decisions that are suitable but not necessarily in the client’s best interest. That less-stringent standard does not apply to trust administrators, who must follow a higher standard. Trust administrators must make sure that their decisions are in the best interest of the client alone, according to reports about the case.
The living beneficiary remaining for the trust is the oil baron’s great-granddaughter. The courts found that trust administrators at JPMorgan failed to adequately explain the trust’s provisions to that woman. In addition, employees at the financial company did not reveal that the bank was benefitting from the sales of inappropriate products to the trust.
As this case demonstrates, it is critical to make sure that you understand the provisions of your trust arrangement. Also, it is important to remember that even trusted financial institutions sometimes make unethical decisions that may harm their clients.
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