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.
Southern District of New York Judge Laura Taylor Swain
District Court Judge Narrows Morgan Stanley MBS Suit
On September 15, 2011, Southern District of New York Judge Laura Taylor Swain granted in part Morgan Stanley’s motion to dismiss claims in a putative class action by MBS investors that Morgan Stanley violated Sections 11, 12, and 15 of the Securities Act of 1933. Plaintiffs allege that Morgan Stanley made material misrepresentations regarding its ratings and the appraisals and underwriting standards of the underlying mortgages in the marketing and sale of the MBS. Judge Swain found that Plaintiffs failed to sufficiently allege any facts supporting any misrepresentation regarding the derivation or integrity of the MBS ratings or that Morgan Stanley had a duty to disclose any alleged underlying flaws in the ratings process. Judge Swain found that Plaintiffs’ allegations regarding the appraisals and underwriting standards were sufficient and denied the motion to dismiss with respect to those claims. Decision.