Federal Home Loan Bank of Pittsburgh v. J.P. Morgan Securities LLC, GD09-016892 | REDACTED Motion to Compel and Redacted Exhibits


Federal Home Loan Bank of Pittsburgh v. J.P. Morgan Securities LLC, GD09-016892 | REDACTED Motion to Compel and Redacted Exhibits

Federal Home Loan Bank of Pittsburgh v. J.P. Morgan Securities LLC, GD09-016892 | REDACTED Motion to Compel and Redacted Exhibits


Federal Home Loan Bank of Pittsburgh,


J.P. Morgan Securities LLC, J.P. Morgan
Mortgage Acquisition Corp., J.P. Morgan
Mortgage Acceptance Corporation I,
Chase Home Finance L.L.C., Chase
Mortgage Finance Corporation, JPMorgan
Chase & Co., Moody’s Corporation,
Moody’s Investors Service, Inc., The
McGraw-Hill Companies, Inc., and Fitch,

Federal Home Loan Bank of Pittsburgh,


J.P. Morgan Securities LLC, JPMorgan
Chase & Co., Moody’s Corporation,
Moody’s Investors Service, Inc., and The
McGraw-Hill Companies, Inc.,


15. All of the JPMorgan trusts at issue here also contained many “statedincome”
loans, and Pittsburgh FHLB has discovered facts which show significant
concern on the part of JPMorgan employees about material misrepresentations
regarding borrowers’ reported income levels, and about the performance of certain
stated income loan programs. The Statement of Facts does not provide any details about
the originator, the vendor, the loan program, or the employees involved. The draft
complaint may do so. And even if those facts relate to a different trust or a different
program, the knowledge of the employees would certainly be relevant to Pittsburgh
FHLB’s claim of fraud, and would support Pittsburgh FHLB’s position that JPMorgan’s
conduct with respect to the trusts at issue in this case was not unique, but rather was
part of a pattern of fraudulent conduct, involving its entire mortgage platform and
related companies, which should be deterred by an award of punitive damages.

16. The lack of specificity in the Statement of Facts has led others to question
what it was the DOJ actually found in its investigation that caused JPMorgan to pay $13
billion. Gretchen Morgenson, writing in the New York Times on November 23, 2013
found the Statement of Facts unsatisfying:

Eager to see what the Justice investigation had found, I consulted the
statement of facts that accompanied the settlement and that JPMorgan had
to acknowledge. There, I reckoned, would be some juicy, new evidence of
the bank’s mortgage misdeeds “uncovered” by assiduous investigators
armed with subpoena power and other government might.

Perusing the 11-page document, I quickly saw that I’d reckoned wrong.
Much of it was the same-old-same-old, a not-very-lively description of a
corrupted Wall Street mortgage factory, based largely on some facts that
have been in the public domain for years.

In other words, although it took the Justice Department more than five
years to pursue a major bank for its role in the mortgage mania, the
investigation seems to have unearthed material that, by and large, could
have been dug up with a spoon.

(Ex. A, attached.)

17. Given the DOJ’s desire not to have the draft complaint become public
until after the settlement was reached, and given JPMorgan’s apparent deep desire to
prevent it from ever seeing the light of day, it would not be at all surprising if the draft
complaint is a much more detailed account of JPMorgan’s fraudulent conduct, and as
such, far more enlightening than the Statement of Facts.


For Plaintiff, FHLB: Janet C. Evans, Esq.
Randall Tietjen, Esq.
Justin T. Romano, Esq.
William H. Manning, Esq.
Damien A. Riehl, Esq.
For Defendant, JPMorgan: Dorothy J. Spenner, Esq.
Tom Paskowitz, Esq.
Jeremy Stamelman, Esq.
Deborah A. Little, Esq.
Samuel W. Braver, Esq.
For Defendant, Fitch: Christopher L. Filburn, Esq.
Julia Mason Wood, Esq.
Elizabeth F. Collura, Esq.
For Defendant, McGraw-Hill: Tammy L. Roy, Esq.
Jacqueline A. Koscelnik, Esq.
For Defendant, Moody’s: James Regan, Esq.
James J. Coster, Esq.
For Defendant, Countrywide: John J. Falvey, Jr., Esq.
Sharon L. Rusnak, Esq.
Aleksandra Sasha Williams, Esq.

(12:24 p.m., Counsel present before the Court.)
– – –

THE COURT: I do believe I brought another
file, so I will be back, because we’re not dealing
with whether silicon can cause cancer.
(Discussion held off the record.)
(Brief pause in proceedings.)
(12:28 p.m.)

THE COURT: Okay. We’ll try again. Be
Now, we’re starting with the rating
agency’s motion, and there’s some 10,000 documents;
is that right?

MS. WOOD: Yes, Your Honor.

THE COURT: Okay. And they’re all
protected — they’re all SARs reports?

MS. WOOD: They’re all — they are on a
log that Plaintiff has prepared of all documents
that are subject to the bank examiner privilege.

THE COURT: Okay. That’s what I meant.

Yes, I’m sorry.

MS. WOOD: Yes.

THE COURT: So the Plaintiffs want to take
the position that there’s no cause shown for any
There are some letters rogatory, I think, both from
Countrywide and the rating agencies.

MS. ROY: Standard & Poor’s, yes.

MS. EVANS: So if we could proceed, I’d
like to talk through the couple of motions to compel
that were on today.


MS. EVANS: Are you all right with that?
This is the original that I am filing on
the motion to compel for receipt of documents
produced to the Department of Justice.
(Counsel and the Court exchange documents.)
This is against JPMorgan.
In August, Your Honor, of this year,
JPMorgan announced that, in an SEC filing, that the
Department of Justice was conducting civil and
criminal investigations relating to its MBS matters
activities. Appended to that motion at Tab B is Page
204 of that disclosure, which discloses — JPMorgan
discloses that there are parallel investigations.
This is up on the right-hand top.

THE COURT: Okay. And what’s the
discovery issue?

MS. EVANS: What we would like is all of
the documents that were produced in connection with
the DOJ investigation. In September of this year,
the Department of Justice indicated that it was
ready to serve a complaint.
My understanding, from public
information — whether it’s accurate or not — is
the complaint did go to JPMorgan. It’s not public.
We don’t have it.
JPMorgan entered into settlement
negotiations right away — it’s been in the
newspaper — for about $11 billion, is the number
that was discussed. The last I know, only from
public statements or publicly available information,
is that Jamie Dimon was involved in the talks and
they are stalled on some points.

THE COURT: Okay. So, what are you asking

MS. EVANS: The documents that were
provided to the Department of Justice in connection
with the civil and criminal investigation into the
mortgage backed securities.


MS. EVANS: It’s the same time frame, too,
Your Honor, and the allegations reported in the
press are the same.


MS. EVANS: It goes on to say in the Wall
Street Journal article that, “…among the documents
is an e-mail from a bank employee warning her
superiors that they were vastly overstating the
quality of the mortgages being bundled into the

MR. PASKOWITZ: Again, hearsay.

MS. EVANS: Pardon me. I was kind enough
not to interrupt you. I appreciate the courtesy.
What we have developed in our case is
exactly — this is exactly it. This is — they are
looking into the RMBS business, which means all
loans; prime, subprime.

THE COURT: So, what are you asking with
respect to the two people?

MS. EVANS: What we would like is the
documents that they produced pursuant to the
subpoenas from the Department of Justice. Now —

THE COURT: Well, what’s that have to do
with two people?

MS. EVANS: That should — if it does not
include the e-mail, then we do want the identity of
the individual who warned her supervisor that they
were vastly overstating the quality of the mortgages
they bundled into securities.

THE COURT: That you believe JPMorgan can
identify that employee?

MS. EVANS: Yeah, I do. This has been a
two-year investigation. It started out from the
Obama administration. We have known that there have
been these subpoenas, and now the Justice Department
has decided that it is doing both civil and criminal
investigation into its entire MBS activities.
That’s JPMorgan’s own disclosure. It’s not just to
subprime or Alt A or different kinds of securities.
Importantly, I don’t know what Ms. Dailey
has to do — Ms. Dailey. Our Special Master; not

Ms. Dailey.

MS. SPENNER: Ms. Dodge.

MS. EVANS: Dodge. She was deciding
whether they were using any more search terms. They
don’t have to do anything. All they have had to do
is download the documents, whatever they were, that
they gave to the Department of Justice and deliver
them to us.
That’s very similar to what S&P did. We
would simply agree, as we did in the S&P DOJ
documents, that we will treat them highly
confidential so you don’t have to go through and
delay. We are getting towards the end. I am very
excited about that.

THE COURT: Now, there is a — you believe
there’s a draft of a complaint that JPMorgan has?

MS. EVANS: I do. All I can tell you is I
read it in publications.

MR. PASKOWITZ: That’s our main problem
with this whole motion, is that what FHLB is
currently asking us is to vastly expand the record
in this case when we’re a couple months away from
the close of discovery, based on a newspaper

THE COURT: Well, I think they could ask
you, if there is a draft of a complaint, to turn
that over.

MR. PASKOWITZ: Whether there is or is
not, I do not know.

THE COURT: If there is.

MR. PASKOWITZ: My concern, I would put on
the record, my concern there in the S&P context,
whether there was a filed complaint that the
government was willing to stand behind, I think you
have a very different situation than a draft
complaint that they may have turned over to JPMorgan
as part of a negotiation.
I think there’s a very different factual
record there that exists and different implications
that can arise.

THE COURT: Okay. I’m going to, for the
time being, let you get any drafts of a complaint
and the name of that employee, if they have it.

MR. PASKOWITZ: I — okay. I think we
have to sort of explore whether there’s any issues
turning that over from the government. I don’t know
if there are or are not. If a complaint has been
shared, whether there are any concerns from the
government’s standpoint as to turning that over, I
just don’t know sitting here today.

THE COURT: Well, you have the draft?

MR. PASKOWITZ: I do not know that we do.

MS. SPENNER: Says the Wall Street
Journal. I have no idea.

THE COURT: The claim is, you have the


MS. SPENNER: Their claim.

THE COURT: Okay. So that, to the extent
that you have it, you turn it over.

MS. SPENNER: I can —

MS. EVANS: And the name of the employee?

MS. SPENNER: I can tell you right now
that, because we have looked into this, that”,

THE COURT: Well, you’ll just answer it.

MS. SPENNER: Say that — say exactly what
I just said?

THE COURT: In your answer.

MR. PASKOWITZ: In our answer.

THE COURT: ‘Tell us who the employee is
referred to in the Wall Street Journal.’ sm. 9

MS. EVANS: May I request the information
in ten days, Your Honor?

MR. PASKOWITZ: The complaint, again,
because we’ll have to explore this issue —

THE COURT: I’ll give you twenty days.

MR. PASKOWITZ: Thank you.

MS. EVANS: Thank you, Your Honor.
The next motion, that is kind of a double
motion, this is for William King’s documents
produced in another piece of litigation, and that is
in the FHFA case against JPMorgan.
He is a named Defendant. His name is
William King. I do want to share with you and tell
you something of who he is.

Here’s — here is an organizational chart


Down Load PDF of This Case

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



This post was written by:

- who has written 9281 posts on FORECLOSURE FRAUD | by DinSFLA.

CONTROL FRAUD | ‘If you don’t look; you don’t find, Wherever you look; you will find’ -William Black

Contact the author

Leave a Reply

Advertise your business on StopForeclosureFraud.com


Please Support Me!

All Of These Are Troll Comments