JPMorgan, Morgan Stanley face growing scrutiny over PE buyouts
TOP STORY: JPMorgan and Morgan Stanley are facing a growing number of shareholder lawsuits over their roles as financial advisers on major take-private transactions, highlighting a potential new source of legal risk for banks closely tied to the private equity industry, according to a report by Bloomberg.
JPMorgan Chase and Morgan Stanley are encountering an increasing number of legal challenges from shareholders concerning their advisory roles in significant private equity buyouts. According to a Bloomberg report, these lawsuits allege that the banks facilitated transactions with private equity firms that they have ongoing profitable relationships with, potentially at valuations that disadvantage other investors.
The claims suggest the advisers could be held accountable if they knowingly aided directors in breaching their fiduciary obligations. This legal pressure has intensified following amendments to Delaware corporate law in 2025, which complicated shareholders' ability to sue directors and executives involved in conflicted transactions.
However, it did not extend similar safeguards to financial advisers, prompting some plaintiffs' attorneys to target banks, particularly after a recent Delaware court decision allowed Goldman Sachs to stay in litigation over a private equity deal. JPMorgan and Morgan Stanley have each been implicated in two such cases, though one against each firm has been struck down.
JPMorgan is contesting a claim that it assisted Hellman & Friedman in the sale of its Snap One Holdings stake in a transaction allegedly detrimental to public shareholders, arguing that the deal proceeded through a legitimate and appropriately managed sale. Morgan Stanley is defending against a new lawsuit stemming from its advisory role in Haveli Investments' $1.5 billion acquisition of database software company Couchbase.
Both institutions have denied any wrongdoing, claiming in their legal filings that they ensured fair sales processes, had no conflicts of interest, and disclosed relevant relationships transparently.
Written by urgent.news from Private Equity Wire's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
