Dexia Sues JPMorgan Over $1.7 Billion in Mortgage Securities

JPMorgan Chase & Co., the biggest U.S. bank by assets, was sued over mortgage-backed securities sold to Dexia SA because the loans underlying the securities were allegedly riskier than promised.

Dexia accused JPMorgan and companies it acquired -- Bear Stearns Cos. and Washington Mutual -- of “egregious fraud,” saying they created and sold mortgage bonds backed by loans that they knew to be “exceptionally bad.”