Here’s another. Goldman sold ABACUS to two funds that *should* have known what they were buying. But in JPMorgan’s case, small time investors ended up with pieces of Squared, and eventually lost money.
JPMorgan sold pieces of Squared to 17 institutional investors, one of which was a mutual fund run by manager Morgan Keegan. Invested in Morgan Keegan’s fund was Horace Grant, a retired Bulls player.
Grant, by proxy, owned small pieces of Squared because he invested in Keegan’s fund. When he lost money in Keegan’s fund, he sued him. A judge awarded him $1.4 million.
The arbitration on that case might actually mean something for the SEC’s investigation. We have to look into it further, but the judge’s ruling might suggest that it was Keegan’s mistake for buying pieces of Squared.
In other words, it wasn’t JPMorgan’s marketing of Squared that was misleading. It was the way Keegan marketed Squared to investors in his mutual fund that was misleading.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.