JPMorgan faces suit over mortgage bonds

New York - JPMorgan Chase will face a US class-action lawsuit over the sale of $10bn worth of allegedly falsely valued mortgage bonds before the financial crisis, a judge has ruled.

Late Tuesday New York federal district judge Paul Oetken dismissed the bank's objections to the suit, first filed in 2009, opening the way for pension funds and others to claim losses on the mortgage-backed securities (MBS) they bought from the it before the crisis.

The plaintiffs in the case accused the bank of packaging mortgages into the bonds that did not meet stated underwriting standards, had false appraisals and false loan-to-value ratios.

That led to sharp losses as the MBS market plummeted following the crash in the US housing market.

The class of plaintiffs, private buyers of the bonds, are led by two California pension funds.

But Oetken refused to set a possible level of damages the plaintiffs could claim, saying they needed to provide more evidence supporting their claims.

Contacted by AFP, JPMorgan declined to comment on the situation.

Last November JPMorgan agreed to pay $13bn to federal and state agencies for losses related to falsely marketed MBS.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
17.65
+0.1%
Rand - Pound
21.20
+0.1%
Rand - Euro
18.92
+0.1%
Rand - Aus dollar
12.23
-0.6%
Rand - Yen
0.13
-0.5%
Platinum
974.69
+0.1%
Palladium
1,589.56
-0.6%
Gold
1,875.95
+0.4%
Silver
22.43
+0.7%
Brent Crude
80.99
+1.3%
Top 40
73,289
-0.3%
All Share
79,371
-0.3%
Resource 10
73,708
-0.5%
Industrial 25
103,091
-0.0%
Financial 15
16,274
-0.6%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders