JPMorgan settles for $400 million with Syncora over mortgage-backed securities
Syncora claimed in its suit that Bear Stearns misrepresented the quality of the securities and tricked the bond insurer into purchasing them.
March 04, 2014 at 05:41 AM
6 minute read
The original version of this story was published on Law.com
When compared to a $13 billion Department of Justice (DOJ) bill or a $2.6 billion settlement for dealings with Bernie Madoff, JPMorgan Chase & Co's latest settlement may seem like chump change. However, the company's deal with bond insurer Syncora Guarantee Inc. shows that the bank's legal woes related to the financial crisis aren't over yet.
Syncora announced in a financial statement on Feb. 28 that JPMorgan will pay $400 million to lawsuits over toxic mortgage-backed securities. Syncora had brought the suits against JPMorgan to recover losses created from securities created and sold by JPMorgan-purchased Bear Stearns and Co., as well as Bear Stearns' EMC Mortgage affiliate.
According to Reuters, Syncora claimed in its suit that Bear Stearns misrepresented the quality of the securities and tricked the bond insurer into purchasing them. The two sides had previously announced an agreement on Feb. 24 but had not released the final settlement announcement.
This settlement adds to a JPMorgan litigation bill that has shot sky high within the past six months. Along with the DOJ and Madoff settlements, JPMorgan has also recently faced a sexual discrimination suit, a suit brought by Mississippi AG Jim Hood alleging misconduct, a deal with investors over the financial crisis, and a settlement with the Commodity Future Trading Commission over the “London Whale” scandal.
With this long list of recent litigation settlements, it's no surprise that analysts are skeptical as to whether the bank to net positive results in 2014. Without including legal expenses, analysts predict JPMorgan's operating expenses to decline to $59 billion in 2014 from $60 billion in 2013, a negative trend at a time when the rest of the financial industry is beginning to flourish once again.
However, JPMorgan's shareholders remain convinced that CEO Jamie Dimon is the man to lead the company past the multitude of settlements. On Jan. 23, the board agreed to increase Dimon's compensation package for 2014.
InsideCounsel is on top of the latest securities news. Check it out with us:
When compared to a $13 billion Department of Justice (DOJ) bill or a $2.6 billion settlement for dealings with Bernie Madoff,
Syncora announced in a financial statement on Feb. 28 that JPMorgan will pay $400 million to lawsuits over toxic mortgage-backed securities. Syncora had brought the suits against JPMorgan to recover losses created from securities created and sold by JPMorgan-purchased Bear Stearns and Co., as well as Bear Stearns' EMC Mortgage affiliate.
According to Reuters, Syncora claimed in its suit that Bear Stearns misrepresented the quality of the securities and tricked the bond insurer into purchasing them. The two sides had previously announced an agreement on Feb. 24 but had not released the final settlement announcement.
This settlement adds to a JPMorgan litigation bill that has shot sky high within the past six months. Along with the DOJ and Madoff settlements, JPMorgan has also recently faced a sexual discrimination suit, a suit brought by Mississippi AG Jim Hood alleging misconduct, a deal with investors over the financial crisis, and a settlement with the Commodity Future Trading Commission over the “London Whale” scandal.
With this long list of recent litigation settlements, it's no surprise that analysts are skeptical as to whether the bank to net positive results in 2014. Without including legal expenses, analysts predict JPMorgan's operating expenses to decline to $59 billion in 2014 from $60 billion in 2013, a negative trend at a time when the rest of the financial industry is beginning to flourish once again.
However, JPMorgan's shareholders remain convinced that CEO Jamie Dimon is the man to lead the company past the multitude of settlements. On Jan. 23, the board agreed to increase Dimon's compensation package for 2014.
InsideCounsel is on top of the latest securities news. Check it out with us:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLawsuit Against Amazon Could Reshape E-Commerce Landscape
King Kullen—the Nation's First Supermarket—Hires Outside Counsel as GC
Don't Rush to Change That Noncompete Just Yet, Employment Lawyers Advise
5 minute readTrending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Mass. Judge Declares Mistrial in Talc Trial: 'Court Can't Accommodate This Case'
- 3Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
- 4It's Time Law Firms Were Upfront About Who Their Salaried Partners Are
- 5Greenberg Traurig Initiates String of Suits Following JPMorgan Chase's 'Infinite Money Glitch'
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250