JP Morgan Securities “breached its fiduciary duties by placing its clients’ cash in low-interest accounts held by its own affiliates and then pocketing the unpaid interest as additional profit,” the complaint states.

“Even worse, JP Morgan Securities failed to adequately disclose to its clients that, with respect to the scheme, it was essentially providing a kickback to its own affiliates at the expense of its clients,” the suit continues.

“Specifically, Defendants deceived their customers for their benefit and that of their affiliates by negotiating one-sided transactions with the Bank that transferred cash to accounts with extremely low interest rates,” the suit states. “JP Morgan Securities failed to disclose or discuss these conflicting transactions, much less obtain informed consent from its clients and management.”

As interest rates have climbed, a wave of lawsuits has accused brokerages of automatically transferring customers’ uninvested funds into interest-bearing cash accounts without adequately disclosing that most of the funds are transferred to affiliated banks with minimal returns for account holders.