JPMorgan Client With Dementia Sues The Bank For Stealing $50 Million From Him And Making Him Move In With Relatives

JPMorgan Client With DementiaA JPMorgan client with dementia has sued America’s biggest bank. The elderly client has accused the bank of pushing high risk investments despite his obvious signs of dementia. As a result, the dementia client is suing the bank for $50 million. 

Peter Doelger had a luxurious homes around the world after a building an energy company and successful investment career.

However, the 86-year-old has been forced to move in with relatives after losing all but $1.5 million to bad investments. Thanks to five years of banking with JPMorgan.

The bank made him sign a ‘big boy letter’ confirming he was competent to make risky investment decisions in complex markets.

However, the bank is now being sued for ignoring the deterioration of a man’s mental state. Doelger had already been hospitalized for delusions and memory loss. He had told one doctor he could hear someone talking to him from his stomach.

Doelger’s wife Yoon told Bloomberg,

“We had 100 percent trust in them that they will manage our assets. We didn’t expect them to make us a fortune but at least make us comfortable.”

Doelger made his own fortune in Boston from building a nationwide network of insulation contractors.

He sold the company to Honeywell in 1995. He then began a successful investment career taking in biotech companies, Korean real estate and complicated energy-based securities.

JPMorgan bought in on his success, extending him a $6 million credit line. The bank then convinced him to move his portfolio to the bank and its MLP specialists in 2015.

JPMorgan Client With Dementia Loses His Portfolio Thanks To Alleged MAlpractice By JPMorgan

Doelger offered to put $33million into MLPs. However, the bank’s guidelines prohibit clients from having more than 5% of their wealth in the risky and volatile investments.

The bank deemed Doelger a ‘sophisticated investor’ legally allowed to take risky stakes. due to his business background

JPMorgan President James Baker told colleagues that Doelger was worth between $90 and $100 million. The bank agreed to allow the $33million investment if he signed a letter absolving them it of liability.

One of Baker’s colleagues told his team that Doelger would ‘sign any letter that we draw up’.

Baker even wrote, ‘Rah whoo!’ on the agreement in celebration when they received his letter in October of that year.

Unfortunately, Doelger was only worth half what the bank thought. He was also already showing pronounced signs of declining mental health.  In addition, he also signed the letter three days after he being diagnosed with paranoid ideation, cognitive deficits and dementia.

He was already carrying a $17million debt to the bank. In addition, over the next three months his portfolio lost 19%.

Doelger was paying up to $400,000 a year in interest and $250,000 in advisory fees. He also lost another $1 million in 2016  after the bank advised him to take a when a credit default swap went bad.

MLPs fell another 17% in 2017. However, JPMorgan offered a sunny forecast for their prospects. The bank then talked Doelger from paying off his debts to them by not passing on rate rises.

Doelger had never used a computer. So, Baker would visit him at his Palm Beach home to update him on his investments.

Yoon said she never understood the discussions. She said she quizzed her husband about them afterwards.

A psychiatrist has told them that Doelger’s dementia was obvious to any observers.

The Value Of Doelger’s Portfolio Plummets

As 2019 ended there was just $20 million in the portfolio. Doelger also owed $10 million to the bank. Yet, JPMorgan offered him another upbeat prediction of the year ahead.

Instead, another $4 million was lost in the first two months due to the Covid pandemic decimating a demand for oil.

Millions more were lost in a market rout on March 24, cutting the investment to $4.1 million.

Within a couple hours from insolvency, Yoon stepped in. She sold the rest of the portfolio days later to pay off their debts.

Doelger’s mighty portfolio was now reduced to just $1.5 million. As a result, they have since been forced to move in with Yoon’s daughter in New Jersey.

The bank denies malpractice and has counter-sued the couple. JPMorgan lawyers claim they warned Doelger of the risks he was running.

The bank also denies it ever noticed anything wrong in its client.

Banks do not have to impose an age limit on those it classifies sophisticated investors although they are supposed to look out for signs of vulnerability.

But the case has sparked demands for reform from campaigners.

JPMorgan has accepted that Doelger is incapable of testifying in the upcoming court cases and the couple are being represented by lawyer James Serritella who is Yoon’s son-in-law.

‘I was horrified by what I saw,’ he said.

‘I don’t believe Peter understood this stuff the way they made him out to understand it.

‘Peter trusted people: “I don’t need to know all the ins-and-outs because I trust you.”

‘So this whole construct of the sophisticated guy, we strongly disagree with that.’

This Article Originally Appeared On LenderMeltdown.com.

Read More About JPMorgan-Case On MFI-Miami.com

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