[1]A federal judge has agreed to sign off on a $388 million settlement between JPMorgan Chase [2] and investors to resolve claims by the investors that Chase misled them about the quality of $10 billion in residential mortgage-backed securities, according to a report from Bloomberg [3].
U.S. District Judge Paul Oetken in the U.S. District Court for the Southern District of New York in Manhattan agreed that the settlement between JPMorgan Chase and the Fort Worth Employees Retirement Fund, along with other investors, is fair and said he would sign off on it, according to the report.
According to a court opinion and order [4], the certificates at issue were presented in nine different offerings through a separate trust for each offering. The plaintiffs in the case contend that JPMorgan Chase, the defendant, should be held liable for material misstatements, falsehoods, and omissions with regards to the quality of the home loans underlying the securities, and that appraisers “falsified appraisal values and failed to follow established appraisal standards.” JPMorgan Chase has denied any wrongdoing in the case.
The investors claim that after the demise of Lehman Brothers in 2008, the maximum value of the certificates was 62 cents on the dollar, according to Bloomberg.
When reached by email, a spokesperson for JPMorgan Chase told DS News the bank had no comment on the settlement.
JPMorgan Chase is no stranger to settlements over mortgage-backed securities for enormous amounts of money. In November 2013, the bank agreed to a $13 billion settlement with the federal government for selling toxic mortgage-backed securities to investors in the run-up to the 2008 financial crisis. At the time, the $13 billion was a record amount for a settlement between the government and a single private company; that record was broken nine months later in August 2014 when Bank of America settled with the government for $16.65 billion over similar claims of selling faulty RMBS that precipitated the crisis.
Click here to read the opinion and order [4] on the case of Fort Worth Employees Retirement Fund v. JPMorgan Chase.