MBIA vs J.P. MORGAN SECURITIES LLC (f/k/a BEAR, STEARNS & CO. INC.),

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MBIA vs J.P. MORGAN SECURITIES LLC (f/k/a BEAR, STEARNS & CO. INC.) – fraudulent acts and omissions by Defendant’s predecessor-in-interest, Bear, Stearns & Co.

MBIA vs J.P. MORGAN SECURITIES LLC (f/k/a BEAR, STEARNS & CO. INC.) – fraudulent acts and omissions by Defendant’s predecessor-in-interest, Bear, Stearns & Co.

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER

MBIA INSURANCE CORPORATION,
Plaintiff,

-against-

J.P. MORGAN SECURITIES LLC (f/k/a
BEAR, STEARNS & CO. INC.),
Defendant.

NATURE OF THE ACTION

1. MBIA seeks to recover damages it suffered as a result of the fraudulent acts and
omissions by Defendant’s predecessor-in-interest, Bear, Stearns & Co. Inc. (“Bear Stearns”) to
induce MBIA to issue a financial-guaranty-insurance policy in connection with the GMAC
Mortgage Corporation Home Equity Loan Trust 2006-HE4 (the “2006-HE4 Securitization”).
Bear Stearns was the lead securities underwriter on the 2006-HE4 Securitization.

2. To make the securities issued by the 2006-HE4 Securitization more marketable,
Bear Stearns sought a financial guaranty insurer to guarantee the trust’s payments to investors in
the event that cash flows to the trust were impaired by the failure of mortgage borrowers to make
payments of principal and interest. To secure MBIA’s agreement to provide this insurance, the
sponsor of the securitization, GMAC Mortgage Corporation (“GMAC Mortgage”), made a set of
comprehensive representations and warranties to MBIA about the characteristics of the
securitized loans and the underwriting standards under which they were originated. Among
other things, GMAC Mortgage represented and warranted to MBIA that the securitized loans
were underwritten generally in accordance with GMAC Mortgage’s underwriting standards and
complied in all material respects with applicable local, state, and federal laws.
[…]

[ipaper docId=106291132 access_key=key-201l50sk6o73vacey1a4 height=600 width=600 /]

 

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2 Responses to “MBIA vs J.P. MORGAN SECURITIES LLC (f/k/a BEAR, STEARNS & CO. INC.) – fraudulent acts and omissions by Defendant’s predecessor-in-interest, Bear, Stearns & Co.”

  1. I used to get excited and hopeful at this type of news, now, not so much.

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  1. […] part of JPMorgan Chase), Morgan Stanley, and other banks undertook frantic last-minute campaigns to unload worthless mortgage securities [paywall] on unsuspecting customers. When the mortgages failed, Bear Stearns extracted lucrative […]


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