- Judge agrees accord between company, investors is fair
- Bank was accused by of misleading pension fund, others
JPMorgan Chase & Co.’s $388 million settlement with investors who claimed the bank misled them about the safety of $10 billion worth of residential mortgage-backed securities was set for final approval.
U.S. District Judge Paul Oetken agreed Friday with both sides that the settlement is fair and said in a hearing in Manhattan that he would sign off on the deal.
The Fort Worth Employees’ Retirement Fund and other investors in nine offerings made before the financial crisis claimed in the suit that JPMorgan misled them about the underwriting, appraisals and credit quality of home loans underlying the securities.
After the 2008 collapse of Lehman Brothers Holdings Inc., the certificates were worth 62 cents on the dollar at most, the investors said.
The bank denied wrongdoing.
JPMorgan in 2013 agreed to a $13 billion settlement with the U.S. to resolve allegations the bank misled investors in mortgage-backed securities about the soundness and risks of the investments that helped bring on the subprime-mortgage crisis of 2008.
The case is Fort Worth Employees’ Retirement Fund v. JPMorgan Chase & Co., 09-cv-3701, U.S. District Court, Southern District of New York (Manhattan).
(The amount of the settlement in the headline was corrected in an earlier version of this story.)