PE Firms Sue JPMorgan Over $1.78B Of Failed MBS

Law360, Los Angeles (August 20, 2013, 8:17 PM ET) -- JPMorgan Chase & Co. and Bear Stearns Companies LLC were sued Tuesday in New York state court by private equity firms alleging the banks didn't disclose that they were privately betting that $1.78 billion worth of mortgage-backed securities the firms bought would default shortly thereafter.

Phoenix Light SF Limited, Blue Heron Funding II Ltd. and other firms accuse the Wall Street banks of fraudulently marketing the residential mortgage-backed securities with materially false and misleading offering documents filed with the U.S. Securities and Exchange Commission.

The plaintiffs...
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