Ambac Unit Slaps JPMorgan With New Subprime Suit

Law360, New York (February 18, 2011, 3:59 PM EST) -- Ambac Assurance Corp., a unit of bankrupt bond insurer Ambac Financial Group Inc., has accused JPMorgan Securities Inc. of duping it into insuring securities backed by a toxic pool of mortgage loans, costing the company $641 million to date.

Ambac lodged the complaint Thursday in the Supreme Court of the State of New York, New York County, alleging that Bear Stearns Cos. Inc. — which was acquired by JPMorgan Chase Bank NA in 2008 — had committed fraud and breached representations and warranties.

Ambac said it...
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