A senior couple's efforts to reclaim millions in alleged investment losses from JPMorgan Chase encountered a setback when a magistrate judge suggested their lawsuit should be dismissed.
Peter Doegler and his spouse, Yoon Doegler, who are retired and were clients of JPMorgan's private banking services, allege that the bank did not uphold its fiduciary responsibilities. They claim JPMorgan failed to disclose conflicts of interest and placed their funds in unbalanced and high-risk investments. Moreover, they accuse JPMorgan of financially exploiting the elderly, noting Peter Doegler's dementia diagnosis since 2014 and alleging the bank was aware of his condition.
JPMorgan has refrained from commenting publicly and has refuted the accusations in court documents.
U.S. Magistrate Judge Jennifer C. Boal determined that Peter Doelger did not meet the criteria for a vulnerable adult under Florida law, noting that evidence did not support a decline in his ability to manage daily activities. Contrarily, records indicate Mr. Doelger remained active and engaged during the specified period, including travel and participation in complex discussions on global politics.
This development is part of an ongoing legal dispute spanning nearly three years, initiated by the Doelgers in a federal court in Boston in June 2021. The couple, long-standing clients of the bank, alleged breach of fiduciary duty, negligence, and other misconduct. They criticized JPMorgan for not adopting a diversified investment strategy suited to retirees' needs, instead concentrating their assets in master limited partnerships (MLPs) that significantly decreased in value over time. The Doelgers contended that JPMorgan misrepresented these MLPs as low-risk and overstated their income potential. Furthermore, these investments were used as collateral for substantial loans issued to Peter Doelger by the bank.
In March 2020, the plummeting value of MLP investments triggered a margin call from JPMorgan, compelling the Doelgers to liquidate all MLPs, with the majority of proceeds going towards loan repayment.
The lawsuit claims the Doelgers incurred losses surpassing $20 million and seeks unspecified damages to be determined in court.
JPMorgan contested these claims, stating it had no knowledge of Mr. Doelger's cognitive decline. The bank described him as a knowledgeable investor who moved his pre-existing MLP portfolio to JPMorgan in 2015, with the bank recommending diversification and a reduced MLP position. JPMorgan has requested the lawsuit's dismissal and seeks legal fees compensation from the couple.
The lawsuit also involves Chickasaw Capital Management, an investment advisory firm managing the MLPs, accused of breaching their contract. Chickasaw has not commented but denied the allegations in court filings.
Magistrate Judge's findings noted Peter Doelger's long history of MLP investment and no medical records during the relevant period indicating incapacity to manage finances. The report concluded insufficient dispute facts to merit a trial.
U.S. District Judge Angel Kelley will decide on the report's acceptance. If approved, only JPMorgan's counterclaims would proceed to trial. The Doelgers plan to challenge the report's conclusions.
James R. Serritella, representing the Doelgers, expressed disagreement with the magistrate's report, intending to object and argue that it overlooks critical evidence and legal principles. Serritella emphasized the importance of a trial to address the allegations thoroughly and warned against the potential discouragement this dismissal could pose to similarly affected investors.
