Municipal bond insurer Assured Guaranty Ltd. has filed suit against JPMorgan Chase Bank NA with regards to the sale of mortgage-backed securities by Bear Stearns & Co. JPMorgan acquired Bear Stearns in 2008.
In July 2010, Assured sued the branch of Bear Stearns — EMC — that had issued the securities. The current suit revises the case by adding JPMorgan as a defendant and including references to claims by more than 35 witnesses.
JPMorgan declined to comment for this story.
The suit claims that Bear's representations concerning its due diligence on the securities were false and misleading. "Bear Stearns concealed the fact that its due diligence was designed to line its pockets at the expense of transaction participants," the suit claims.
Since acquiring Bear Stearns, "JPMorgan Chase has stripped EMC of its assets, seeking to render EMC a judgement-proof shell," the complaint said. "JPMorgan directed EMC to deny financial guarantors' repurchase demands while simultaneously asserting the same breach claims against originators."
