In a relief to
JPMorgan Chase & Co.
reported that the lawsuit filed by Syncora Guarantee Inc. has
been dismissed. The lawsuit was filed in the New York state
Supreme Court in Manhattan.
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When filing the case in 2011, Syncora had accused JPMorgan of
providing misleading information prior to signing the agreement
concerning insuring interest and principal repayments related to
the $666 million bond (GreenPoint Mortgage Funding Trust
2007-HE1) created in 2007, which was supported by 9,871 equity
home loans. As a result, Syncora had to shell out more than
$168.6 million in settling claims of the aggrieved parties.
In 2012, JPMorgan tried to dismiss the case by stating that
Syncora had already filed litigation claims in the U.S. District
Court. However, in May 2012, Justice Charles Ramos ruled out the
company's plea. Now, an appeals court in Manhattan has dismissed
the case by reversing Justice Charles Ramos's ruling.
In Jul 2012,
Bank of America Corporation
) agreed to pay $375 million to settle a lawsuit filed by Syncora
over risky mortgage backed securities (MBS). In 2009, Syncora had
filed a case against BofA that bore similar charges as those
leveled against JPMorgan.
Though the dismissal of the lawsuit is a relief for JPMorgan, the
company still faces several lawsuits pertaining to the sale of
risky MBS preceding the financial crisis. Additionally, in its
latest quarterly filings, the company disclosed that the
Department of Justice (DOJ) and the Securities and Exchange
Commission (SEC) are investigating violation of several federal
security laws during the sale of risky residential mortgage
backed securities (RMBS) during 2005-2007.
Given this and several other cases, at the end of second-quarter
2013, JPMorgan increased its anticipated legal losses (exceeding
its existing litigation reserves) to $6.8 billion from $6.0
billion in the prior quarter.
Currently, JPMorgan carries a Zacks Rank #3 (Hold). Other better
performing major regional banks include
The PNC Financial Services Group, Inc.
). While BankUnited has a Zacks Rank #1 (Strong Buy), PNC
Financial has a Zacks Rank #2 (Buy).