John Hancock Suit Against JPMorgan Moved to Federal Court
John Hancock Life Insurance’s lawsuit against JPMorgan Chase & Co. over residential mortgage- backed securities was moved to federal court from New York state court.
John Hancock, a unit of Boston-based Manulife Financial Corp. (MFC), sued New York-based JPMorgan in state Supreme Court in Manhattan in January, accusing the bank of fraud tied to the sale of residential mortgage-backed securities.
Federal courts have jurisdiction because the claims arise under U.S. law, the case involves international banking or financial operations, and it is related to bankruptcy proceedings, according to documents filed by the defendants in state court today.
John Hancock bought the securities “in reliance on the false and misleading” statements made by the defendants, which include Bear Stearns & Co. and Washington Mutual Inc., according to the complaint. JPMorgan acquired Bear Stearns and WaMu during the 2008 financial crisis.
The suit seeks unspecified damages for market losses and principal and interest payments, as well as the cancellation of contracts and recovery of payments for the investments.
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 John Hancock Life Insurance Co. v. JPMorgan Chase & Co. (JPM), 650195/2012, New York State Supreme Court (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com