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Judge’s Ruling Paves Way For Class-Action Suit against JPMorgan Chase

courtroom-justicescalesA federal judge ruled on Wednesday that investors' claims in nine separate offerings for $10 billion worth of residential mortgage-backed securities (RMBS) were similar enough for the investors to proceed as a class in a lawsuit against JPMorgan Chase.

U.S. District Judge J. Paul Oetke's ruling clears the way for investors to proceed with a class-action suit against JPMorgan Chase, meaning that all the investors can be represented by a lead plaintiff in the case. Investors are accusing the bank of misleading them by making false statements regarding the RMBS when the securities were packaged and sold to the investors in 2007, a year before the subprime lending crisis.

The ruling applies only to the liability phase of the suit, Oetken said.

"Because the class is currently certified for liability purposes, this phase of litigation will focus on the issue of whether defendants made material false statements or omissions in the offering documents that affected the value of the certificates owned by the plaintiff class members," Oetken said.

This is not the first time JPMorgan Chase has come under fire over RMBS. In 2013, the bank agreed to a then-record $13 billion settlement with the government amid allegations that the bank sold faulty mortgage-backed securities leading up to the subprime crisis in 2008.

A spokesperson from JPMorgan Chase declined to comment on Oetken's ruling.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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