JP Morgan managed funds for CMMF on a discretionary basis under an investment guideline agreement that called for principal protection and high liquidity. CMMF alleged that the bank instead created an undiversified portfolio with a high concentration in subprime and non-agency mortgage securities leading to a $150 million for CMMF.
Counsel for the plaintiff, Quinn Emanuel Urquhart & Sullivan, engaged SFC Associates to assess whether, as a matter of economics and investment industry practice, the bank managed the portfolio prudently and in a matter consistent with the investment guidelines and to calculate the economic damage CMMF suffered as a result of the portfolio mismanagement. After reviewing the evidence in the form of portfolio holdings, trading records, communications, policies, procedures, and deposition transcripts, SFC Associates provided an in-depth expert report and testified in New York State Supreme Court. The New York Supreme Court judge ordered the bank to pay a significant award to the plaintiff.