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An Oklahoma judge has ordered JPMorgan Chase to pay $18 million to the trust benefit ting the granddaughter of an early 1900s oil baron.Tulsa County Judge Linda G. Morrissey found JPM had been “grossly negligent and reckless” in its administration of the trust of Carolyn S. Burford, an oil heiress who died in 1996, according to Susanne Craig of Dealbook.
Burford was the daughter of William Skelly, who founded Skelly Oil Co. and died in 1957. His wife had ties to Mobil Oil. According to Ziva Branstetter of the Tulsa World, the Skellys are considered among Tulsa’s most influential family.
Morrissey charged that JP Morgan breached its fiduciary duty when it sold unsuitable financial products to the trust.
“The case is likely to put a spotlight on trust accounts. Under the current law, some stockbrokers are require to act in a customer’s best interest—but that is a less-stringent standard that allows them to sell products that are suitable, but not necessarily in a client’s best interest. Brokers who handle trust accounts are held to the higher standard and have to do what is best for the client alone.”
The one living beneficiary of the trust is Burford’s daughter Ann Fletcher. Morrissey found that JP Morgan didn’t properly explain the financial product to Fletcher, nor disclose that the bank was benefiting from the transaction.