S.C. RABIN and JOHN HOLLINGER v. JPMORGAN CHASE BANK, N.A. and JP MORGAN CHASE & CO.

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AMENDED COMPLAINT

Plaintiffs, through their counsel, hereby allege the following upon personal knowledge as to their own acts and upon information and belief based, among other things, upon the investigation made by plaintiffs by and through such counsel as to the acts of the defendant JP Morgan Chase Bank, N.A. (the “Bank”), JP Morgan Chase & Co. (“JPM”) and others as described herein. The majority of evidence in support of plaintiffs’ claims are in defendants’ exclusive possession, custody, or control. Plaintiffs’ claims are likely to have additional evidentiary support after a reasonable opportunity for discovery.

JURISDICTION AND VENUE

1. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1331 and § 22 of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77(v); § 27 of the Securities Exchange Act of 1934 (“Exchange Act”), 28 U.S.C. § 1332 (b), the Class Action Fairness Act of 2005 and 28 U.S.C. § 1367.

2. There is diversity of citizenship between each plaintiff and defendant Bank, a federally chartered bank and JPM, with their headquarters in the State of New York. Further, the claims of all members of the Class well exceed $5,000,000, exclusive of interest and costs. Although plaintiff Rabin and a substantial number of members of the Class reside in Illinois, more than two-thirds of the Class members are residents of other states. The conduct of the defendants as described herein occurred directly and indirectly within this District, as well as in other states. Further, defendant have continuous, material and systemic contacts within this District through, inter alia, numerous branches and offices of the Bank and otherwise. Accordingly, this Court has personal jurisdiction over the defendants.

3. Venue is proper in this District pursuant to § 22 of the Securities Act, § 27 of the Exchange Act and 28 U.S.C. § 1391(b) because the defendant had undeniable daily and regular contacts with this District by reason of, inter alia, the common scheme, plan and conspiracy set forth below, to materially reduce the fiduciary responsibilities owed by the Bank to plaintiffs and members of the Class, to foist upon the fiduciary accounts of plaintiffs and all members of the Class shares of the proprietary mutual funds of defendant including, in particular, those of the JP Morgan Funds, and to extract from such accounts excessive and unjust fees and other benefits.

4. In connection with the acts alleged in this Complaint, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to, the mails, interstate telephone communications and the facilities of the national securities markets. Defendants, directly and/or through agents, affiliates and/or independent contractors distributed prospectuses within and otherwise marketed and sold JP Morgan Funds shares to the fiduciary accounts of members of the Class residing in this District, much of which conduct originated within this District.

THE PARTIES

5. Plaintiff S. C. Rabin, a citizen of the State of Illinois, is a beneficiary of one of the Bank’s fiduciary accounts who is and was a victim of its breaches of fiduciary duties and its other wrongful conduct as set forth herein.

6. Plaintiff Hollinger, a citizen of the State of Colorado, was a beneficiary of one of the Bank’s fiduciary accounts until on or about August, 2006, when the account was closed. He too was a victim of the Bank’s breaches of fiduciary duties and its other wrongful conduct as set forth herein.

7. Defendant JP Morgan Chase Bank, N.A. (the “Bank”) is a federally chartered Bank domiciled in New York, and is a wholly owned subsidiary of defendant JP Morgan Chase & Co. (“JPM”). At material times during the Class Period defined below, the Bank has served as a corporate fiduciary for fiduciary accounts for the benefit of plaintiffs and members of the Class. As indicated below, at all material times, JPM controlled the transactions described herein.

BACKGROUND FACTS

8. This Class Action is brought by plaintiffs on their own behalf and on behalf of all those similarly situated against the defendants arising out of, inter alia, violations of the federal securities law as well as breaches of fiduciary duty owed to them by defendant Bank. This case is brought against the backdrop, inter alia, of the Bank’s breaches of fundamental fiduciary duties owed by it to plaintiffs and the members of the Class defined below.

9. As stated by the Court in Busby v. Worthen Bank & Trust Co., N.A., 484 F. Supp. 647, (E.D.Ark. 1979):

The dispositive point, in this Court’s judgment, is that [the bank] is the trustee of an express trust. As such, it is subject to what is probably the highest standard of fiduciary duty known to the law. Doubts must be resolved against the trustee, and against its employees, and in favor of the beneficiaries. The famous passage by Chief Judge (later Mr. Justice) Cardozo, speaking for the New York Court of Appeals, has lost none of its force: ‘Many forms of conduct permissible in a work-a-day world for those acting at arm’s length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the “disintegrating erosion” of particular exceptions. Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd. It will not consciously be lowered by any judgment of this court….’ The trustee has a duty to avoid even the appearance of impropriety…”

[emphasis added, internal citations omitted]

10. By acting as described herein and ignoring the explicit guidance provided by federal banking regulators and the Court in the Busby case as quoted above and other pronouncements of fiduciary obligations, the Bank has been a “faithless fiduciary” which put its own interests before those of the plaintiffs and members of the Class.

Plaintiffs’ Trust Accounts

11. In 1969, plaintiff Hollinger, as a result of medical malpractice when he was one year old, was caused to be afflicted with cerebral palsy and other serious medical conditions. Following a jury trial in 1974, a judgment in his favor was rendered leaving his parents with a net amount of approximately $600,000 to be used for his lifetime care.

12. Thereafter, his family caused the funds available from the malpractice judgment to be placed in trust for plaintiff Hollinger at the American National Bank of Chicago, one of the numerous predecessor financial institutions ultimately merged into the Bank. The income from his trust account has been applied to his care and welfare including, inter alia, tutoring expenses, creating a wheelchair-accessible bathroom, therapists’ fees and, for some years, payments to his mother, Katherine Kylen, for plaintiff Hollinger’s benefit.

13. Despite the fact that plaintiff Hollinger’s parents were co-trustees with the Bank, the Bank did not make any attempt to determine his needs from them or from plaintiff Hollinger directly. Despite federal regulatory requirements to do so, neither did the Bank nor its predecessors had annual or other periodic reviews of plaintiff Hollinger’s account with him or with the co-trustees to discuss appropriate investment strategies of otherwise. As with other co-fiduciaries of accounts at the Bank, it ignored such co-fiduciaries and the beneficiaries of the accounts and made investment decisions unilaterally.

14. Plaintiff Rabin’s Trust accounts were established her father, Dr. David D. Rubin, to insure that his wife and daughter would be well cared for throughout their lives. Plaintiff Rabin is the daughter of David D. Rabin, deceased. Although the Bank periodically had discussions with plaintiff and her mother, Bertha Rubin, with respect to certain of the investments purchased for plaintiff Rabin’s trust accounts, at all relevant times, the Bank acted unilaterally in making investment decisions and never had annual or other periodic reviews of plaintiff Rabin’s trust accounts with her to discuss appropriate investment strategies of otherwise.

JPM’s Goal To Be A Nationwide Financial Giant

15. Over the course of the last 15 years, JPM has made numerous acquisitions of other financial institutions throughout the United States, including Bank One and predecessors, American National Bank of Chicago and First National Bank of Chicago, which previously serviced the fiduciary accounts of plaintiffs. In 2004, Bank One and JPM merged to form “one of the strongest financial institutions in the world” as touted by Bank One’s press release.

16. In the course of JPM’s long chain of acquisitions of other financial institutions (“Acquired Banks” many of which were purchased for substantial premiums over book value, it relied increasingly on squeezing more and more revenues and profits from fiduciary operations, including standardizing the investment of fiduciary assets and forcing them, increasingly, into proprietary mutual funds. As stated at p. 60 of the JP Morgan Funds Statement of Additional Information dated November 1, 2006, it is acknowledged that one of the investment advisors to the JP Morgan Funds “represents a consolidation of the investment advisory staffs of a number of [Acquired Banks] of the former Bank One Corporation . . .”.

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