RMBS Claims Against JP Morgan Dismissed for Lack of Standing

On December 13, 2011, Judge Korman of the Eastern District of New York granted in part a motion to dismiss a putative class action accusing JP Morgan affiliates of misrepresentations and omissions in connection with $36.8 billion worth of mortgage-backed securities. Judge Korman ruled that the lead plaintiff lacked Article III standing to assert claims in connection with any certificates other than those in the specific tranches of the specific securitizations in which the lead plaintiff had purchased certificates. As to certain of those offerings, the Court further dismissed plaintiffs’ claims as to those certificates for which the lead plaintiff failed to allege that the certificates had been either bought directly from a defendant or purchased in initial public offerings. As to those certificates for which plaintiffs were permitted to proceed, the Court further dismissed without prejudice plaintiffs’ claims insofar as they related to alleged misstatements concerning credit enhancements and credit ratings. However, the Court allowed plaintiffs’ claims related to alleged misstatements concerning appraisal practices and the underwriting guidelines of certain originators to proceed. As to all issues on which the Court granted defendants’ motion other than Article III standing, the Court granted plaintiffs leave to replead. Order.