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Allstate Hits JPMorgan With MBS Fraud Suit

Law360 (February 16, 2011, 6:43 PM EST) -- Allstate Insurance Co. on Wednesday accused JPMorgan Chase Bank NA and its affiliates of committing fraud by duping the insurer into paying more than $750 million for risky mortgage-backed securities in the form of pass-through certificates.

Allstate sued JPMorgan for common-law fraud and negligent misrepresentation in the Supreme Court of the State of New York, County of New York, alleging the company misrepresented the securities as safe and highly rated and systematically ignored underwriting standards in acquiring the loans that backed the securities.

"Defendants knew the...
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