JP Morgan sued over $156m loss

Len Blavatnik, the Russian-born billionaire who last week pulled out of a rescue deal for Setanta, is embroiled in a bitter battle with his company's United States investment adviser, JP Morgan Chase, which he says lost him US$98 million ($156 million) on toxic mortgage assets.

Blavatnik's Access Industries entrusted US$1 billion to JPMorgan's asset management arm, only to find the account plunging in value when the housing market downturn turned into a full-blown credit crisis in 2007.

Access said yesterday it was filing a lawsuit in a US court to recoup the losses and get damages.

JP Morgan told Blavatnik its managers ran his money according to an agreement, and that the billionaire was sophisticated enough to know he couldn't expect above-average returns without above-average risks.

Access Industries claims that the US$1 billion ended up being disproportionately invested in risky sub-prime mortgage derivatives, when the agreement stipulated no one type of asset should make up more than one-fifth of the account.

JPMorgan says Access brought that on itself by taking money out of the account, forcing it to sell more liquid credit instruments.

- INDEPENDENT