Lawsuit: JPMorgan Chase Gave Preferential Treatment to Large Clients Seeking PPP Loans

CHICAGO, July 29, 2020 /PRNewswire/ -- JPMorgan Chase gave preferential treatment to large commercial banking clients seeking emergency loans through the Paycheck Protection Program (PPP) at the expense of smaller businesses, according to a proposed class-action lawsuit filed Wednesday that will be the subject of a consolidation hearing today by a Joint Panel on Multistate Litigation.

According to the lawsuit filed by Dallas-based Fears Nachawati Law Firm on behalf of Illinois technology company Ajira AI LLC, Chase and other banks participating in the Small Business Administration's Paycheck Protection Program became key gatekeepers in the disbursement of nearly $349 billion in pandemic-related financial aid for businesses. The program awarded participating banks with an origination fee based on a percentage of the value of each loan they processed.

According to published reports, nearly all of Chase's private and commercial banking clients who applied for a PPP loan received one, while only about 1 out of 15 smaller businesses that sought loans was successful. While small companies struggled to navigate glitches in the Chase website, larger businesses received individualized personal attention, according to the lawsuit. Chase ultimately awarded $14 billion in loans – the most of any bank participating in the PPP program.

"Small companies like Ajira AI deserved a fair chance for emergency funding to avoid layoffs and save their businesses," said Fears Nachawati trial lawyer Matthew McCarley. "Instead, they were victims of a two-tiered system that processed loans for favored customers first."

Ajira AI applied for a $30,000 PPP loan through Chase on April 7. The company was informed on April 17 that the funds had been exhausted. The company later provided additional information when funding was replenished, but that application was denied because bank representatives wrongly rejected it for lacking documentation.

The lawsuit seeks damages for negligence, fraudulent concealment, tortious interference and unfair and deceptive business practices. Since similar lawsuits have been filed on behalf of other small businesses, Mr. McCarley said those lawsuits should be consolidated so that they can move through the courts more efficiently for all parties.

The case is Ajira AI LLC et al. v JPMorgan Chase Bank, Cause No. 20-CV-04428, in the U.S. District Court for the Northern District of Illinois. In addition to Fears Nachawati, Ajira is represented by Chicago-based Khowaja Law Firm.

Dallas-based Fears Nachawati Law Firm represents individuals and businesses in cases involving environmental and water contamination litigation, public entities, private entities, mass torts, drug and medical device cases, wrongful death, and products liability. For more information, visit https://www.fnlawfirm.com.

Media Contact:
Robert Tharp
800-559-4534
[email protected]

SOURCE Fears Nachawati Law Firm

Related Links

https://www.fnlawfirm.com

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