New Delhi: Peter Doelger, a once-wealthy client of JPMorgan Chase & Co., recently lost a legal battle to recover the $50 million fortune he had accumulated before his cognitive health began to decline due to dementia. A federal judge in Boston dismissed the lawsuit filed by Peter, 87, and his wife, Yoon, who accused JPMorgan of mishandling his investments, leading to significant financial losses. The court ruled that there was insufficient evidence to show that the bank was aware of Peter’s deteriorating mental health at the time his investments took a hit.
The lawsuit had brought to the forefront the issue of whether financial firms like JPMorgan could be held responsible for the financial losses of clients whose mental faculties diminish over time. Although financial institutions are responsible for screening their clients to ensure they are capable of making sound investment decisions, there is currently no industry-wide standard for monitoring the cognitive health of clients as they age, which was a key issue in this case.
The Doelgers claimed that JPMorgan had invested a substantial portion of Peter’s fortune in risky oil and gas partnerships, which exceeded the firm’s internal investment guidelines. Peter, who had previously attested to his expertise in such investments, was said to have lost his ability to understand these complex assets over time, and increasingly relied on the bank’s advice. These investments eventually wiped out the majority of the family’s wealth within five years.
However, US District Judge Angel Kelley found that the couple did not provide sufficient proof that JPMorgan had breached its duties or exploited Peter’s cognitive decline. The judge also noted that neither Peter’s family nor any representatives had informed the bank of his mental health condition, despite Yoon’s testimony that she had mentioned her husband’s memory issues to their main contact at the bank. Judge Kelley concluded that this information was not enough to activate the bank’s policies designed to protect elderly clients.
The judge’s decision prevents the case from going to trial, although the Doelgers are considering an appeal. In addition, the couple now faces a countersuit from JPMorgan, which seeks to recover legal costs from the three-year legal dispute. James Serritella, the Doelgers’ attorney and son-in-law, expressed disappointment with the ruling, stating that the court’s decision denied justice for his elderly clients. He criticized JPMorgan for using its vast resources to fight the case and demand legal fees from the family.
JPMorgan, however, welcomed the ruling, noting that Judge Kelley’s opinion highlighted inaccuracies in the plaintiffs’ claims and dismissed their assertions as unsupported by the facts.
This case has highlighted the growing issue of how to detect cognitive decline in wealthy clients and whether financial firms have an obligation to act on such concerns. As the population ages, particularly with retirees holding record amounts of wealth, the financial services industry may need to implement more robust policies to monitor clients’ cognitive health over time.
At JPMorgan, employees are required to report any signs of diminished capacity in elderly clients, such as memory loss or disorientation, to a supervisor. In court, Yoon described instances where Peter appeared confused during conversations with the firm, while an expert witness testified that by 2019, his mental condition would have been apparent to those handling his portfolio. Yet, JPMorgan’s main contact for the Doelgers, James Baker, testified that he did not know about Peter’s declining health until the lawsuit was filed. The court agreed, stating that internal emails showing Peter’s long-winded conversations did not indicate knowledge of cognitive issues.
The Doelgers also claimed that Peter had been diagnosed with rapidly progressive dementia as early as 2014, but the court rejected this, relying on JPMorgan’s medical expert who found no abnormal signs in Peter’s 2014 brain scans, aside from age-related changes. Although there was evidence from a 2015 emergency room visit in which Peter was diagnosed with cognitive deficits and dementia, the judge found no proof that JPMorgan was aware of this diagnosis when handling his investments.
In 2015, JPMorgan documents listed the Doelgers’ net worth at $100 million, while their actual assets were closer to $50 million. Peter had heavily invested in master limited partnerships (MLPs) tied to oil and gas, which the bank’s guidelines recommend limiting to 5% of a client’s portfolio. At the time, Peter had over $30 million invested in MLPs. JPMorgan raised concerns and required Peter to sign a “Big Boy letter,” acknowledging that he understood these investments and was advised to diversify.
The Doelgers alleged that JPMorgan overstated Peter’s wealth to approve his concentrated investments in MLPs, but the court dismissed these claims, ruling that Peter was in the best position to know the value of his assets and had confirmed this by signing the letter. Ultimately, the court sided with JPMorgan, determining that the family could not prove their claims.
