A New York state appeals court in Manhattan Tuesday reversed an earlier ruling and dismissed Syncora Guarantee Inc.'s lawsuit accusing JPMorgan Chase & Co. of defrauding the bond insurer by misrepresenting a structured finance transaction.

Syncora sued JPMorgan in 2011 over the transaction, a residential mortgage backed security for which Bear, Stearns & Co., now a unit of JPMorgan, served as manager and underwriter. The deal, known as GreenPoint Mortgage Funding Trust 2007-HEI, quickly went south when underlying mortgage loans defaulted and Syncora was forced to pay claims under its insurance policy.

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