JPMorgan Chase & Co. ( JPM ) has been sued by an Indianapolis-based Episcopal church over the fraud and mismanagement of its trust accounts. The Christ Church Cathedral has filed a lawsuit in U.S. District Court claiming that the bank, by purchasing more than 177 unsuitable investment products using the church funds between 2004 and 2013, caused a loss worth $13 million for the church.
With JPMorgan already battling several legal issues, the latest accusation has done no good to the confidence of investors. Barely a week ago, the Securities and Exchange Commission (SEC) announced a probe in JPMorgan's private banking division, regarding the potential conflict of interests. (Read more: JPMorgan Under SEC Investigation: Probe for Conflict of Interest )
Notably, founded in 1837, the church is listed on the National Register of Historic Places. Lilly Jr., the grandson of the founder of the pharmaceutical company Eli Lilly grew up here. Nevertheless, per the accusation of the church, JPMorgan took help of a 'guided architecture' platform to select products that would fetch it maximum returns. However, the church claims that this actually led to toxic investments that were destined to fail.
For a reputed financial institution, this ongoing spate of probes and accusations is indeed disturbing.
JPMorgan currently carries a Zacks Rank #3 (Hold). Some better-ranked finance stocks include City National Corp. ( CYN ), Bank of Commerce Holdings ( BOCH ) and BofI Holding, Inc. ( BOFI ). All these stocks hold a Zacks Rank #2 (Buy).