Insurer Sues JPMorgan Over Alleged Bear Stearns CDO Fraud

Law360, New York (November 27, 2012, 9:14 PM EST) -- A financial insurer sued a JPMorgan Chase & Co. unit in New York state court Monday, saying it lost over $100 million in a fraudulent collateralized debt obligation scheme by Bear Stearns & Co., which JPMorgan acquired in 2008.

CIFG Assurance North America Inc. alleges that, in 2006, Bear Stearns persuaded it under false pretenses to provide financial guaranty insurance on credit default swaps in two CDOs that were stocked with toxic mortgage-backed securities.

The suit also claims that not only did Bear Stearns pass off...
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