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Investment Account Cases – Mortgage Securities

NM Homes One, Inc. v. JPMorgan Chase Bank, N.A. and Todd Brown 08 civ. 7679 (S.D.N.Y.) Manhattan

This action alleges that plaintiff placed $130 million in a discretionary investment account which JPMorgan was supposed to invest conservatively (“seek income and principal stability”) but which it and investment manager Brown allegedly invested heavily in subprime mortgage securities, maintaining the positions despite the increasing problems in the mortgage market during 2007. Plaintiff asserted claims for breach of contract; breach of fiduciary duty; violations of Section 10(b) and Section 20(a) of the federal securities laws; fraudulent misrepresentations More...

Assured Guaranty (UK) Ltd. v. J.P.Morgan Investment Management Inc., 08-603755 (N.Y. Supr. N.Y. Co.) Manhattan

This action was filed by reinsurance company Assured Guaranty in connection with losses suffered by JPM investment client Orkney Re II PLC, for which Assured was guarantor. “As the investment manager for approximately 553 million in assets for Orkney, Defendant JPMIM engaged in intentional breaches of fiduciary duty, gross negligence and intentional breaches of contract based upon the reckless and imprudent manner in which JPMIM plunged the assets under its care into undiversified, highly risky subprime mortgage-backed securities…and maintained such imprudent More...

CMMF, LLC v. J.P. Morgan Investment Management, Inc. and Ted Ufferfilge 09-601924 (N.Y. Supr. N.Y. Co.) Manhattan

This action alleges that CMMF, a fund created by Access Industries Group, engaged J.P. Morgan Investment Management Inc. to manage an account designed for conservative and liquid investment, including diversity and credit rating requirements and in particular a requirement that no more than 20% of fund assets could be invested in mortgage-backed securities. Plaintiff alleges that JPMIM and the plaintiff’s individual investment manager instead saturated CMMF’s investment account with “the riskiest and most illiquid mortgage securities” at prices defendants More...