The Episcopal Christ Church Cathedral in Indiana is suing financial services giant JPMorgan over an alleged mismanagement that it says resulted in the devaluation of the church's funds.
According to CNN, the Church, represented by Pence Hensel, is seeking to recover losses of $13 million as well as legal costs.
Christ Church Cathedral gained a sizable fund after Eli Lilly Pharmaceuticals' Founder Eli Lilly Jr made the church a beneficiary of his estate in the 1970s. The church received 10%, a sizable portion of the Lilly estate, leading Eli Lilly Jr to appoint local banks to manage the Church's funds on its behalf. The three trustees in charge of Christ Church's funds were Indiana National Bank, American Fletcher National Bank and Trust and Merchants National Bank & Trust Company of Indianapolis.
JPMorgan acquired two of the three banks, effectively acquiring control of the Christ Church funds, in 2004.
Rev Carlsen alleged in his lawsuit that JPMorgan began to transfer the church's funds to invest them in its own products. By 2007, JPMorgan also had the church's money invested in alternative investments, which meant that the firm started charging higher fees for the services. CNN reported that the church was paying JPMorgan $177,000 by 2013, a far cry from the $35,000 it maintained before JPMorgan acquired the previous trustees.
The reverend also accused the bank of not disclosing additional fees despite repeated requests.
The suit also claimed that the performance of the church's investments fell sharply, going down to $31.6 million in 2013 from $34 million in 2004. This, the priest claimed, affected the church's charitable activities significantly and forced it to cut back on donations to the community.
JPMorgan denied the accusations and accused the Church of "cherry picking" the details.
"Even though the Trust distributed more than $13 million to the church between 2006 and 2013, the Trust still gained well over $10 million during that period," JPMorgan spokeswoman Kristen Chambers told CNN in an email.
