Judge Laura Taylor Swain

JP Morgan Settles RMBS Lawsuit for $500 Million

On February 1, JP Morgan Chase & Co. settled federal securities claims brought by investors led by the Public Employees’ Retirement System of Mississippi and the New Jersey Carpenters Health Fund related to Bear Stearns’ sale of $17.58 billion in residential mortgage-backed securities. The settlement is subject to approval by U.S. District Judge Laura Taylor Swain of the United States District Court of the Southern District of New York.  Settlement Agreement.

Federal Court Dismisses Claims Against Bear Stearns Based on RMBS Credit Ratings

On March 30, 2012, Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York dismissed claims based on credit ratings brought by several retirement and pension funds against Bear Stearns & Co., Inc. and related affiliates in connection with the sale of RMBS pass-through certificates. Plaintiff brought claims under Section 11, 12(a)(2) and 15 of the Securities Act of 1933. The court found that plaintiffs failed to plead that the rating agencies disbelieved their ratings, but granted plaintiffs leave to amend to allege Bear Stearns was aware of the inaccuracy of the credit ratings. The court, however, declined to dismiss claims that Bear Stearns made misrepresentations concerning the quality of the underlying loans in its offering documents. It also rejected Bear Stearns’ argument that plaintiffs lacked standing to sue on tranches they did not purchase. Decision.