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Case Status:    SETTLED
On or around 05/02/2014 (Settlement preliminarily approval)

Filing Date: April 25, 2008

According to the docket, the case was removed from the State Court to the Federal District Court system on April 25, 2008 after being filed on March 26, 2008.

The complaint alleges that J.P. Morgan Acceptance Corporation 1 issued false and misleading Registration Statements and Prospectus Supplements during the class period. JP Morgan Acceptance and the Defendant Issuers caused Registration Statements to be filed with the Securities and Exchange Commission in connection with the issuance of billions of dollars of Certificates. The Certificates were issued pursuant to Prospectus Supplements, each of which was incorporated into the Registration Statements. The Certificates included several classes or trenches, which had various priorities of payment, exposure to default, interest payment provisions and/or levels of seniority. These Certificates were supported by large pools of mortgage loans. The Registration Statements represented that the mortgage pools would primarily consist of loan groups generally secured by first liens on residential properties, including conventional, adjustable rate and negative amortization mortgage loans.

The complaint continues its allegations, stating that investors purchased the Certificates based upon two primary factors: return (in the form of interest payments), including timing of principal and interest payments, and safety (risk of default of the underlying mortgage loan assets). The Registration Statements discussed the underwriting standards purportedly used in connection with the underwriting of the underlying mortgage loans and included numerous representations about the loan-to-value ratios used to qualify borrowers, the appraisals of properties underlying the mortgages and the maximum debt-to-income ratios permitted on the mortgage loans.

Also alleged by the plaintiffs, the Registration Statements omitted and/or misrepresented the fact that the sellers of the underlying mortgages to JP Morgan Acceptance were issuing many of the mortgage loans to borrowers who: (i) did not meet the prudent or maximum debt-to-income ratio purportedly required by the lender; (ii) did not provide adequate documentation to support the income and assets required for the lenders to approve and fund the mortgage loans pursuant to the lenders' own guidelines; (iii) were steered to stated income, asset and low documentation mortgage loans by lenders, lenders' correspondents or lenders' agents, such as mortgage brokers, because the borrowers could not qualify for mortgage loans that required full documentation; and (iv) did not have the income required by the lenders' own guidelines to afford the required mortgage payments which resulted in a mismatch between the amount loaned to the borrower and the capacity of the borrower. The Registration Statements failed to disclose that the lenders or the lenders' agents knew that the borrowers either could not provide the required documentation or refused to provide it.

Finally, the complaint alleges that the Registration Statements did not disclose that the underwriting, quality control and due diligence practices utilized in connection with the approval and funding of the mortgage loans were so weak that some borrowers were given mortgage loans based on stated income in the loan applications with purported income amounts that could not possibly be reconciled with the jobs claimed on the loan application or through a check of free "online" salary databases.

As a result of these alleged misstatements and omissions, the Certificates sold to plaintiffs and the Class were secured by assets that had a much greater risk profile in the form of a statistically significant difference between the expected versus actual performance of such assets than represented in the Registration Statements, and defendants offered superior credit ratings on the Certificates as a result of defendants' failure to disclose the underwriting defects and appraisal manipulations.

On July 24, 2009, a putative securities class action, entitled Public Employees' Retirement System of Mississippi v. Moody's Investors Service, Inc., et al, was filed in the Eastern District of New York. According to the complaint, on December 7, 2005, JPMAC caused a Form S-3 Registration Statement (No. 333-130192) to be filed with the Securities and Exchange Commission ("SEC") in connection with the issuance of billions of dollars of Certificates.' The Certificates were sold to investors pursuant to Prospectuses and Prospectus Supplements, each of which was incorporated into the Registration Statement (collectively the "Offering Documents"). The Certificates were supported by home mortgage loans (the "Mortgage Loans") originated by various lenders identified in the Offering Documents, including Chase Home Finance LLC, WMC Mortgage Corporation, Countrywide Home Loans, Inc. and PHH Mortgage Corporation (generally referred to as, the "Originators"). The Offering Documents represented that the mortgage pools primarily consisted of loans secured by first or second liens on residential properties. Certificate holders effectively owned an interest in the underlying Mortgage Loans and were entitled to receive "pass-through" distributions (payments of interest and, if applicable, principal) made by loan borrowers. The Trusts issued the Certificates in multiple "tranches," or classes, which were generally organized according to the priority with which they were entitled to receive the "pass-through" distributions. In general, those tranches designated as "senior" received distributions ahead of those designated as "subordinate." This capital structure required the lower ranked, subordinate tranches to absorb losses first, but paid investors a higher coupon rate.

A Notice of Related Case was filed and on October 21, 2009, the Court entered an order granting a motion to consolidate Plumbers' & Pipefitters' Local #562 Supplemental Plan & Trust, et al. v. J.P. Morgan Acceptance Corp. I, et al and Public Employees' Retirement System of Mississippi v. Moody's Investors Service, Inc., et al.

On November 5, 2009, Magistrate Judge William D. Wall issued the Report and Recommendation, recommending that Public Employees' Retirement System of Mississippi’s motion for appointment of counsel and lead plaintiff be granted, and that the Iron Workers Funds’ motion be denied. On November 24, 2009, Senior Judge Edward R. Korman adopted the Report and Recommendation.

On March 8, 2010, the plaintiff filed a Consolidated Class Action Complaint, and on May 7, 2010, the defendants responded by filing two motions to dismiss.

According to the Notice of Voluntary Dismissal dated on July 7, 2011, pursuant to Rule 41(a)(1)(i) of the Federal Rules of Civil Procedure, Lead Plaintiff, the Public Employees’ Retirement System of Mississippi, voluntarily dismisses, with prejudice, those claims asserted under the Securities Act of 1933, 15 U.S.C. §77a et seq., in the above-captioned action, and all related consolidated actions incorporated therunder, only as to defendants Moody’s Corp., The McGraw-Hill Companies, Inc., and Fitch, Inc.

On December 13, 2011, the Court entered the Order granting in part and denying in part 57 Motion to Dismiss. According to the Order, the defendants' motion to dismiss is granted in part and denied in part. Specifically, material misstatements and omissions regarding the appraisal standards and the underwriting guidelines are sufficiently pled. The same is true with respect to the Section 11 claims (and corresponding Section 15 claims) based on the following Certificates: JPMMT 2006-A1 2A2; JPMMT 2006-A5 2A1; JPMMT 2007-A1 6A1; JPMALT 2006-A4 A7; JPMMAT 2006-CH2 AV2. The Section 12(a)(2) claim (and corresponding Section 15 claim) based on JPMALT 2006-A4 A7 is also sufficiently pled. The Lead Plaintiff is granted leave to replead, except as to Article III standing, tranche-based statutory standing, and economic loss based on JPMMT 2006-A3 7A1 and JPMMAT 2006-RM1 A2.

On March 7, 2014, a Stipulation and Agreement of Settlement was struck by the parties in the amount of $280 million. On May 2, 2014, an Order Preliminarily Approving Settlement and Providing for Notice by the Court.

COMPANY INFORMATION:

Sector: Financial
Industry: Money Center Banks
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol:
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. New York
DOCKET #: 08-CV-01713
JUDGE: Hon. Edward R. Korman
DATE FILED: 04/25/2008
CLASS PERIOD START: 01/01/2006
CLASS PERIOD END: 03/31/2007
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Coughlin Stoia Geller Rudman & Robbins LLP (NY)
    200 Broadhollow Road, Suite 406, Coughlin Stoia Geller Rudman & Robbins LLP (NY), NY 11747
    631-367-7100 631-367-1173 · info@csgrr.com/
No Document Title Filing Date
COURT: E.D. New York
DOCKET #: 08-CV-01713
JUDGE: Hon. Edward R. Korman
DATE FILED: 03/08/2010
CLASS PERIOD START: 01/01/2006
CLASS PERIOD END: 03/31/2007
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (New York, NY), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
  2. Bernstein Litowitz Berger & Grossmann LLP (San Diego)
    12481 High Bluff Drive, Suite 300, Bernstein Litowitz Berger & Grossmann LLP (San Diego), CA 92130
    858.793.0070 858.793.0323 · blbg@blbglaw.com
  3. Pond Gadow & Tyler
    502 South President Street , Pond Gadow & Tyler, MS 39201
    601.948.4878 601.948.4878 ·
  4. Wolf Popper, LLP
    845 Third Avenue, Wolf Popper, LLP, NY 10022-6689
    877.370.7703 212.486.2093 · IRRep@wolfpopper.com
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