JPMorgan Chase (JPM) has agreed to pay $500 million to settle more than six years of class action litigation over Bear Stearns’ sale of $17.58 billion of mortgage securities during the financial crisis, according to an article in Reuters.
It resolves claims that Bear, which JPMorgan bought in 2008, misled investors when it sold certificates backed by more than 47,000 largely subprime and low documentation "Alt-A" mortgages in 14 offerings from May 2006 to April 2007.
Bear was accused of making false and misleading statements in offering documents about underwriting guidelines used by its EMC Mortgage unit, Countrywide Home Loans, Wells Fargo and other lenders, and the accuracy of associated property appraisals.
The settlement still requires approval by U.S. District Judge Laura Taylor Swain in Manhattan.
