A federal judge has approved a $500 million settlement in a lawsuit, led by a handful of pension funds, that accused JP Morgan of knowingly selling toxic securities to investors.
The lawsuit actually stems from securities issued by Bear Sterns; but Sterns was acquired by JP Morgan in 2008.
More details from Bloomberg:
The settlement will be allocated among a group of pension funds, led by the Public Employees’ Retirement System of Mississippi and the New Jersey Carpenters Health Fund, as well as Police and Fire Retirement System of the City of Detroit and the State of Oregon.
According to the pension funds, offering documents shown to investors contained false and misleading statements about the securities, holding them out as the highest quality and with low risk.
“As a result of the untrue statements and omissions, plaintiffs and the class purchased certificates that were far riskier than represented, not of the ‘best quality’ and not equivalent to other investments with the same credit ratings,” the group said in its complaint.
The case covered 22 offerings constructed from over 64,000 underlying mortgage loans from almost 500 originators, according to court documents.
The $500 million settlement was reached late in 2014, but only approved this week.
Photo by Sarath Kuchi via Flickr CC License
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