The Delaware Supreme Court has chosen to sidestep what it termed a “general” and “abstract” question of law stemming from a shareholder derivative suit against JPMorgan Chase directors over their handling of the massive losses caused by a rogue trader who came to be known as the “London Whale.”
The high court was asked, in a certified question from the U.S. Court of Appeals for the Second Circuit, what factors should be considered under Delaware law in determining whether a board had acted in a grossly negligent fashion if, in response to a shareholder demand, it investigated allegations of wrongdoing but failed to look into corporate officers’ alleged misstatements in the wake of the wrongdoing.
