Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

JPMorgan, Ally Sued by HSH Nordbank Over Mortgage Bond Losses

Dec. 30 (Bloomberg) -- JPMorgan Chase & Co., the biggest U.S. bank by assets, and Ally Financial Inc. were among the financial institutions blamed by the German lender HSH Nordbank AG in lawsuits over losses on about $293 million in mortgage bonds.

Offering documents for the securities contained “material misrepresentations and omissions” about the loans backing the securities, HSH Nordbank said in summonses filed yesterday in New York State Supreme Court.

Wrongdoing by JPMorgan, Ally and other defendants named in three separate cases “led directly” to losses on the securities, HSH Nordbank said. Barclays Capital Inc. and Credit Suisse Securities (USA) were also among those sued for their roles in different offerings, according to court papers.

HSH Nordbank also claims that offering materials contained misrepresentations about the legal validity of assignments of loans to mortgage-securitization trusts and the rights of the trusts to receive interest and principal payments on the loans, which are used to pay investors.

In one case, HSH Nordbank, based in Hamburg, Germany, is suing over $130 million in mortgage securities. Another covers about $117 million in bonds, and a third concerns $46 million, according to court papers.

Gina Proia, a spokeswoman for Detroit-based Ally, declined to immediately comment on the lawsuit. Steven Vames, a Credit Suisse spokesman, declined to comment. Representatives for Barclays and JPMorgan didn’t respond yesterday to e-mails seeking comment.

The cases are HSH Nordbank AG v. Ally Financial Inc., 653651-2011, HSH Nordbank AG v. JPMorgan Chase & Co., 653656-2011, and HSH Nordbank AG v. Barclays Bank Plc, 653652-2011, New York State Supreme Court (Manhattan).

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.