JPMorgan Chase & Co. (NYSE:JPM) is attempting to keep its shareholders from voting on a break-up plan that a number of labor unions are trying to impose on it. The labor unions are attempting to force the bank’s board to break it up because of what happened in the London Whale incident. JPMorgan Chase & Co. (NYSE:JPM) is reportedly facing enforcement action because of the incident, which cost the bank more than $6 billion in losses.
A letter sent to the Securities and Exchange Commission earlier this month indicates that the board is trying to keep the proposal out of the list of proposals its shareholders will vote on in the spring. Lawyers for the bank say shareholders should not be allowed to vote on it because it deals with the bank’s ordinary business, which is an exclusion the SEC allows. The letter also called the proposal vague, indefinite, and false or misleading.
CNBC reports that the proposal comes from the AFL-CIO’s Reserve Fund, a union fund, which actually owns some shares of JPMorgan Chase & Co. (NYSE:JPM). It asks directors of the bank to create a committee that would look into “extraordinary transactions that could enhance stockholder value,” which would include breaking up the bank into one or more parts. The fund wants the panel to hire outside advisors and report to shareholders 120 days after the annual meeting in the spring.
The American Federation of State, County & Municipal Employees, another union, has filed proposals like this one with Citigroup Inc. (NYSE:C), Morgan Stanley (NYSE:MS) and Bank of America Corp (NYSE:BAC).
There has been talk and speculation throughout the banking industry from some experts who believe America’s largest banks should break up. Morgan Stanley (NYSE:MS)’s CEO said he doesn’t think the federal government will support a breakup of the nation’s largest banks.