JPMorgan Sued by Asset Management Fund Over Securities
JPMorgan Chase & Co. was sued by Asset Management Fund over claims it gave faulty information involving $515.6 million in residential mortgage-backed securities.
The suit, filed in New York state Supreme Court in Manhattan yesterday, accuses JPMorgan of making “material representations and omissions” regarding underwriting standards used to make mortgage loans that were pooled into the securities.
Asset Management Fund, based in Chicago, said it bought the securities from May 2003 to May 2007, from the defendants, which also include Bear Stearns & Co. and Washington Mutual Inc. (WAMUQ), both of which were acquired by JPMorgan.
“Plaintiffs did not know the true facts regarding defendants’ misrepresentations and omissions in the offering materials, and justifiably relied on those misrepresentations and omissions,” lawyers for Asset Management Funds said in court documents. “Defendants’ wrongdoing has led directly to plaintiffs’ damages, which include loss of market value on the securities.”
Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.
Other Lawsuits
Tasha Pelio, a spokeswoman for New York-based JPMorgan, declined to comment on the lawsuit in an e-mail.
DZ Bank AG, Dexia SA and Manulife Financial Corp. (MFC)’s John Hancock Life Insurance unit are among companies that have also sued JPMorgan over residential mortgage-backed securities in New York state Supreme Court this year.
Asset Management Fund does business as AMF Funds, according to court documents. The firm, which is managed by Shay Assets Management Inc., had about $590 million in assets under management in 2011, according to its website.
The case is Asset Management Fund v. JPMorgan Chase & Co. (JPM), 650320/2012, New York state Supreme Court (Manhattan)
To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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