JPMorgan Chase and Morgan Stanley are facing legal scrutiny over their roles as financial advisers in major corporate buyouts. The shareholder lawsuits test how far investment banks can be held responsible when investors claim a sale process favored insiders or private-equity interests over public shareholders.
The disputes are in the Delaware Court of Chancery and follow Delaware’s 2025 corporate-law changes, which strengthened protections for certain directors, officers and controlling shareholders. Those changes did not create the same protection for financial advisers accused of knowingly helping a fiduciary breach.
The trend is broader than these two disputes. Bloomberg reported that financial advisers have been named as defendants in at least five such cases since Delaware’s March 2025 law changes.
JPMorgan and the Snap One Lawsuit
The JPMorgan dispute concerns Resideo Technologies’ approximately $1.4 billion acquisition of Snap One Holdings. The deal was announced in April 2024 at $10.75 per share and closed in June 2024. Private-equity firm Hellman & Friedman controlled about 72% of Snap One’s shares. J.P. Morgan Securities and Moelis advised Snap One.
A former Snap One shareholder later filed a proposed class action in Delaware alleging that Hellman & Friedman pushed for a sale because it wanted liquidity as the investment fund holding its stake approached the end of its planned life. The complaint claims the process favored the controlling investor and produced an unfair price for public shareholders.
JPMorgan and the other defendants dispute the allegations. JPMorgan has sought dismissal, arguing that the transaction reflected a legitimate and properly conducted sale process. The claims remain allegations and are not findings of wrongdoing.
Morgan Stanley and the Couchbase Buyout
Morgan Stanley is separately facing a shareholder lawsuit tied to Haveli Investments’ roughly $1.5 billion acquisition of database software company Couchbase.
Couchbase agreed to a cash deal valued at $24.50 per share. Morgan Stanley acted as Couchbase’s exclusive financial adviser and provided a fairness opinion. SEC filings show that during the two years before the opinion, Morgan Stanley and its affiliates received about $5 million to $10 million in fees for advisory work involving Haveli and related entities.
That relationship was disclosed during the sale process. The lawsuit nevertheless highlights whether an adviser’s business ties with a bidder can create a conflict and whether those ties were adequately understood and managed by the board.
Why Delaware Law Matters
The central legal theory is aiding and abetting a breach of fiduciary duty. Under Delaware law, plaintiffs generally must show a fiduciary relationship, a breach, knowing participation by the alleged aider and abettor, and resulting damages.
That is a demanding standard. A commercial relationship with a buyer or controlling shareholder is not enough by itself. Plaintiffs generally must show that the adviser knew of the underlying fiduciary breach and substantially assisted it.
Delaware’s 2025 amendments to Section 144 made it easier for certain conflicted transactions to qualify for statutory protection when specified approval procedures are followed. But the legislation expressly preserved claims against people who knowingly participate in fiduciary breaches. That has increased attention on financial advisers in merger litigation.
Morgan Stanley Has Already Won One Similar Case
Recent rulings also show how difficult these claims can be. In July 2026, the Delaware Court of Chancery dismissed claims against Morgan Stanley arising from Bain Capital’s $4.5 billion acquisition of Envestnet.
The court found that the complaint did not adequately allege that Morgan Stanley misled the board, concealed material information, acted outside board direction, or knowingly participated in a fiduciary breach.
What the Lawsuits Mean for Wall Street
The JPMorgan and Morgan Stanley cases could push banks toward more detailed conflict disclosures during merger negotiations. Large investment banks often advise private-equity firms, finance acquisitions and work with portfolio companies, making overlapping relationships common.
For shareholders, the cases provide another potential route to challenge allegedly unfair transactions. For banks, they reinforce the importance of disclosure, board oversight and a well-documented sale process.
For now, neither case establishes liability. The disputes are part of an evolving area of Delaware merger law in which courts must separate ordinary Wall Street relationships from conduct that amounts to knowing participation in a fiduciary breach.
