JPMorgan Chase & Co. and Dexia SA agreed to settle a New York lawsuit over $1.6 billion of mortgage-backed securities. Terms of the settlement weren’t disclosed in a June 26 court filing.
Dexia sued JPMorgan, Bear Stearns Cos. and Washington Mutual Inc. in 2012, claiming that loans backing securities purchased from 2005 to 2007 were riskier than promised. Dexia, based in Brussels, accused the lenders of “egregious fraud” in the sale of the securities.
JPMorgan purchased assets of Washington Mutual and Bear Stearns after they collapsed in 2008.
U.S. District Judge Jed Rakoff dismissed most of the lawsuit in 2013, but after a federal appeals court found that the law regulating international banking didn’t give the federal court jurisdiction in a similar case, Rakoff vacated his ruling and sent the lawsuit to state court.
JPMorgan didn’t immediately respond to messages left with media relations seeking comment on the settlement and Dexia spokeswoman Caroline Junius-Tchekhoff didn’t immediately return a voice mail.
The case is Dexia SA v. Bear Stearns & Co., 12-cv-04761. U.S. District Court, Southern District of New York (Manhattan).