BRADENTON, Fla. — A New York Supreme Court judge late Tuesday rejected JPMorgan’s motion to dismiss two lawsuits brought earlier this year by Syncora Guarantee Inc. and Assured Guaranty.

The insurers’ suits allege that the investment bank fraudulently induced them to provide insurance coverage for Jefferson County, Ala.’s nearly $3.2 billion of failed variable-rate and auction-rate sewer warrants.

Judge James Yates also dismissed counterclaims brought by Jefferson County, which is a defendant in Syncora’s suit. The county alleged that Syncora was negligent, breached its contract, and fraudulently omitted information about its investments and insurance of collateralized debt obligations and residential mortgage-backed securities.

“The county has been unable to point to a single fact or piece of circumstantial evidences that indicates that [Syncora] knew or had reason to know prior to 2004 that its existing exposure to CDOs or RMBSs was risky,” the judge wrote. “Judging by the all-encompassing nature of the credit crisis, which affected the financial industry in 2008, [Syncora] was not alone in this ignorance.”

JPMorgan declined to comment on the rulings.

Jefferson County Commission president David Carrington said he could not comment because he had not yet read the ruling.

“The court’s rejection of JPMorgan’s motions affirms that insurers like Syncora and Assured are entitled to truthful and complete information before issuing insurance,” said Jonathan Pickhardt with Quinn Emanuel Urquhart and Sullivan LLP, which is representing both insurers. “Syncora and Assured were entitled to know that JPMorgan was paying bribes to the county to get underwriting business.”

Pickhardt said the judge’s dismissal of the county’s counterclaims “joined other courts in soundly rejecting efforts by bond issuers to hold insurers liable for the impact the credit crisis had on insurer ratings.”

“We are confident that our claims have merit and the county’s claims did not,” he said. “We now look forward to getting into discovery and proving our claims at trial.”

Syncora and Assured’s suits say their claims arose “out of one of the biggest cases of municipal corruption in United States history and a massive fraud perpetrated by JPMorgan and Jefferson County.”

Syncora’s civil suit was filed in May alleging that Jefferson County and JPMorgan “fraudulently induced” it to provide more than $1 billion in insurance coverage for the county’s sewer warrants.

Syncora said it would not have insured the warrants had it known about bribes JPMorgan paid to Jefferson County commissioners so that the investment bank would be selected as lead underwriter for the warrants and counterparty to “lucrative swap agreements,” or had it known the county could not repay the warrants.

The bribes came to light in civil court filings by the Securities and Exchange Commission and a federal criminal corruption case involving former County Commission President Larry Langford, Montgomery bond dealer Bill Blount, and Alabama lobbyist Al LaPierre. The SEC settled securities violations with JPMorgan and is pursuing civil cases against JPMorgan bankers Charles LeCroy and Douglas MacFaddin.

Syncora’s allegation concerning Jefferson County’s ability to repay the warrants is based on a Paul B. Krebs & Associates engineering report in 2003 that was only uncovered in late 2008 during a federal case in which Jefferson County’s trustee Bank of New York Mellon, Financial Guaranty Insurance Co., and Syncora unsuccessfully sought a receiver for the county’s sewer system.

A receiver was later appointed by a state court judge.

The Krebs report reviewed the sewer system’s revenues and predicted a shortfall of funds to pay debt service unless the county raised rates significantly or found new sources of revenue, Syncora’s suit said.

Assured filed its civil suit in June alleging that it too was “fraudulently induced” to provide more than $378 million in insurance coverage for the county’s sewer warrants. Jefferson County is mentioned in the suit, but only JPMorgan is named as a defendant.

In language very similar to Syncora’s suit, Assured said it would not have insured the sewer warrants if it had known about bribes that JPMorgan paid to Jefferson County commissioners.

Assured said it paid more than $4 million on a surety bond and that it has additional exposure on other policies.

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