Republic Fraud Suit Against Bear Stearns Tossed

Law360, New York (April 15, 2010, 1:16 PM EDT) -- A federal judge has thrown out a suit Republic Bank & Trust Co. filed accusing Bear Stearns & Co. Inc. of fraudulently misrepresenting the risk of $52 million in subprime mortgage-backed securities the Kentucky bank purchased.

Bear Stearns' representations that the mortgage loans backing its securities were “reasonably safe” and “prudent” was only an opinion, not a fraudulent statement, Judge Charles R. Simpson of the U.S. District Court for the Western District of Kentucky said in an opinion Monday.

“Whether something is reasonably safe is an...
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