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US agency sues JPMorgan over mortgage securities

Published on Dec 18, 2012 7:24 AM

(REUTERS) - The United States (US) credit union regulator sued JPMorgan Securities and Bear Stearns & Co on Monday over alleged misconduct in the sale of US$3.6 billion (S$4.4 billion) in mortgage securities to credit unions that collapsed because of losses from the securities.

The lawsuit by the National Credit Union Administration is its second against JPMorgan involving losses to credit unions.

In June 2011 the agency sued it over securities in which JPMorgan was the underwriter and seller. That suit is still pending.

Bear Stearns, which JPMorgan acquired in 2008, made misrepresentations in connection with the underwriting and subsequent sale of mortgage-backed securities to US Central, Western Corporate, Southwest Corporate and Members United Corporate federal credit unions, the agency said.

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