FHFA v. JPMC – 11-06188

National Debt

national debt


Mortgage Related

Government Sponsored

Announcement Date: July 1, 2016


U.S. District Court
Southern District of New York

Federal Housing Finance Agency


JPMorgan Chase & Co. et al

Plaintiff Federal Housing Finance Agency (“FHFA”), as conservator of The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”), by its attorneys, Quinn Emanuel Urquhart & Sullivan, LLP, for its Complaint herein against JPMorgan Chase & Co. (“JPMorgan Chase”); JPMorgan Chase Bank, N.A. (“JPMorgan Bank”); J.P. Morgan Mortgage Acquisition Corporation (“J.P. Morgan Acquisition”); .P. Morgan Securities LLC (f/k/a J.P. Morgan Securities Inc.) (“J.P. Morgan Securities”); J.P. Morgan Acceptance Corporation I (“J.P. Morgan Acceptance”) (collectively, the “JPMorgan Defendants”); Bear Stearns & Co. Inc. (“BSC”); EMC Mortgage LLC (f/k/a EMC Mortgage Corporation) (“EMC”); Structured Asset Mortgage Investments II Inc. (“SAMI”); Bear Stearns Asset Backed Securities LLC (“BSABS”) (collectively, the “Bear Stearns Defendants”); WaMu Asset Acceptance Corporation (“WaMu Acceptance”); WaMu Capital Corporation (“WaMu Capital”); Washington Mutual Mortgage Securities Corporation (“WaMu Securities”) (collectively, the “WaMu Defendants”); Long Beach Securities Corporation (“Long Beach Securities”); Citigroup Global Markets, Inc. (“Citigroup”), Credit Suisse Securities (USA) LLC (“Credit Suisse”), Goldman, Sachs & Co. (“Goldman Sachs”), and RBS Securities, Inc. f/k/a Greenwich Capital Markets, Inc. (“RBS Greenwich”) (collectively, the “Other Underwriter Defendants”); David M. Duzyk, Louis Schioppo, Jr., Christine E. Cole, Edwin F. McMichael, William A. King, Brian Bernard, Matthew E. Perkins, Joseph T. Jurkowski, Jr., Samuel L. Molinaro, Jr., Thomas F. Marano, Kim Lutthans, Katherine Garniewski, Jeffrey Mayer, Jeffrey L. Verschleiser, Michael B. Nierenberg, Richard Careaga, David Beck, Diane Novak, Thomas Green, Rolland Jurgens, Thomas G. Lehmann, Stephen Fortunato, Donald Wilhelm, Michael J. Kula, Craig S. Davis, Marc K. Malone, Michael L. Parker, Megan M. Davidson, David H. Zielke, Thomas W. Casey, John F. Robinson, Keith Johnson, Suzanne Krahling, Larry Breitbarth, Marangal I. Domingo, Troy A. Gotschall, Art Den Heyer, and Stephen Lobo (the “Individual Defendants”) (together with the JPMorgan Defendants, the Bear Stearns Defendants, the WaMu Defendants, Long Beach Securities, and the Other Underwriter Defendants, the Defendants”) alleges as follows:


1. This action arises out of Defendants’ actionable conduct in connection with the offer and sale of certain residential mortgage-backed securities to Fannie Mae and Freddie Mac (collectively, the “Government Sponsored Enterprises” or “GSEs”). These securities were sold pursuant to registration statements, including prospectuses and prospectus supplements that formed part of those registration statements, which contained materially false or misleading statements and omissions. Defendants falsely represented that the underlying mortgage loans complied with certain underwriting guidelines and standards, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans. These representations were material to the GSEs, as reasonable investors, and their falsity violates Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, 15 U.S.C. § 77a, et seq., Sections 13.1-522(A)(ii) and 13.1-522(C) of the Virginia Code, Sections 31-5606.05(a)(1)(B) and 31-5606.05(c) of the District of Columbia Code, and constitutes negligent misrepresentation, common law fraud, and aiding and abetting fraud.