Reuters reported a panel of the American Arbitration Association as saying that JPMorgan’s asset management unit promoted its own funds at expense of American Century funds thereby intentionally breaching a contractual agreement tied to the 2003 purchase from American Century.
Arbitrators concluded by saying: "JPMorgan breached the contract over and over again. Evidence that compels this finding and conclusion of the one-sided sales and marketing support given to JPMorgan Asset Management and its funds is voluminous."
American Century won the arbitration ruling on 10 August 2011.
The panel said that JPMorgan agreed to promote the American Century funds when it purchased Retirement Plan Services, which handles 401(k) plans for employers, from American Century.
But JPMorgan wanted to buy the entire company, and the firm expected that if American Century funds performed worse, that company’s value might fall, making it cheaper to buy, the arbitrators said.
JPMorgan held a 41% stake in American Century until August, when it sold that stake to Canadian Imperial Bank of Commerce for $848m.