JPMorgan Chase & Co. has initiated lawsuits against a number of customers who supposedly took advantage of a glitch on its app to pilfer thousands of dollars. The error, coined the infinite money glitch, essentially allowed customers to borrow limitless amounts of money.
The financial institution has taken legal action against particular traders who used the error for personal financial gain. These lawsuits follow an investigation by the bank into suspicious trades that took advantage of this glitch.
A frequent allegation is that traders were able to borrow excessive amounts of money through this flaw, which let them take short positions against the market or specific stocks. In some cases, traders were supposedly able to borrow double or even triple the amount of money they had on deposit with the bank.
In one instance, a customer allegedly borrowed over $100,000 despite having a balance of just over $50,000 in the account. Another trader is said to have borrowed $2 million against a balance of just $109,000.
The lawsuits filed by JPMorgan accuse the customers named in the proceedings of unjust enrichment and demand the return of funds supposedly procured through the glitch. The exact number of customers affected or amount of money involved is yet to be determined.
The bank has since then corrected its app to prevent any future exploitation. It has also stated that it is taking legal action to protect its clients and ensure the integrity of the market. The accused customers, who are yet to publicly respond to the lawsuits, could face financial penalties if found guilty.
JPMorgan’s legal action is part of a broader attempt to ensure a similar exploit does not happen in the future. It is reinforcing its systems to prevent any further unlawful exploitation of glitches, and emphasizing the vital importance of ethical trading practices.
