The lawsuit,
brought by Fort Worth Employees' Retirement Fund and other investors in
offerings made before the 2008 financial crisis, accused JPMorgan of misleading
them about the underwriting, appraisals and credit quality of the home loans
underlying the certificates.
The lawsuit
said that after Lehman Brothers Holdings Inc failed, the certificates were
worth at most 62 cents on the dollar. JPMorgan agreed to a $13 billion
settlement with the Justice Department in 2013 over allegations that the bank
had misled investors in mortgage-backed securities about the soundness and
risks of the investments that helped bring on the subprime-mortgage crisis of
2008.
Throughout
the litigation process, JPMorgan has said that the poor performance of the
certificates was not due to the quality of the loans, but was caused by the
collapse of the overall economy. The $388 million settlement was disclosed in a
court filing on Friday. It is subject to approval by a judge.
The case,
whose caption names a different plaintiff, is Fort Worth Employees' Retirement
Fund v. JPMorgan Chase & Co, U.S. District Court, Southern District of New
York, No. 09-03701.
Source:
Guardian
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