JPMorgan Chase & Co., the largest U.S. bank by assets, was sued by Bank Hapoalim BM over $361.2 million in residential mortgage-backed securities in New York state court.
Israel’s second-biggest bank is seeking damages for claims including common-law fraud, fraudulent inducement and negligent misrepresentation, according to court filing today in Manhattan. The bank accuses JPMorgan of making material misrepresentations in the offering materials for the investments.
“Plaintiff did not know the true facts regarding defendants’ misrepresentations and omissions in the offering materials, and justifiably relied on those misrepresentations and omissions,” Bank Hapoalim said in the filing. “Defendants’ wrongdoing has led directly to plaintiff’s damages, which include loss of market value on the securities.”
Jennifer Zuccarelli, a spokeswoman for JPMorgan, didn’t immediately respond to an e-mail seeking comment on the suit.
Bank Hapoalim, based in Tel Aviv, sued Charlotte-based Bank of America Corp., the second-biggest U.S. bank, in the same court in April over $721 million worth of residential mortgage-backed 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.
The case is Bank Hapoalim BM v. JPMorgan Chase & Co., 652799/2012, New York State Supreme Court (Manhattan).