In 2006, Blavatnik’s CMMF vehicle deposited $1bn with JP Morgan, and ordered not to invest more than 20% of the fund in mortgage securities.
The court said that the bank invested nearly 60% of Blavatnik’s fund in subprime mortgage-backed securities, which sustained huge losses, when mortgage market busted in 2008.
Blavatnik filed a lawsuit in 2009 accusing the US-bank for not honouring its investment norms and claimed more than $100m in compensation.
Commenting on the court verdict, Blavatnik said, "I hope that this decision sends a clear message to JPMorgan that they have to honour their obligations to their clients."
"There are a lot of people out there who, I understand, feel they have been wronged by JPMorgan but cannot afford to take on a huge bank. They shouldn’t have to."
JP Morgan said, "We are pleased the court rejected CMMF’s negligence claims and found that our investment professionals lived up to their responsibilities.
"We respectfully disagree with the court’s interpretation of our agreement with CMMF and are considering our options regarding that finding."
The judge in its ruling said that JP Morgan should pay $42.5m as compensation as well as interest at the rate of 5% a year from 2008.
